Correlation Between LG Electronics and Wysiwyg Studios
Can any of the company-specific risk be diversified away by investing in both LG Electronics and Wysiwyg Studios at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LG Electronics and Wysiwyg Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and Wysiwyg Studios Co, you can compare the effects of market volatilities on LG Electronics and Wysiwyg Studios and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LG Electronics with a short position of Wysiwyg Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and Wysiwyg Studios.
Diversification Opportunities for LG Electronics and Wysiwyg Studios
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 066570 and Wysiwyg is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and Wysiwyg Studios Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wysiwyg Studios and LG Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LG Electronics are associated (or correlated) with Wysiwyg Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wysiwyg Studios has no effect on the direction of LG Electronics i.e., LG Electronics and Wysiwyg Studios go up and down completely randomly.
Pair Corralation between LG Electronics and Wysiwyg Studios
Assuming the 90 days trading horizon LG Electronics is expected to generate 0.46 times more return on investment than Wysiwyg Studios. However, LG Electronics is 2.2 times less risky than Wysiwyg Studios. It trades about -0.04 of its potential returns per unit of risk. Wysiwyg Studios Co is currently generating about -0.03 per unit of risk. If you would invest 12,462,900 in LG Electronics on September 1, 2024 and sell it today you would lose (3,492,900) from holding LG Electronics or give up 28.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Electronics vs. Wysiwyg Studios Co
Performance |
| Timeline |
| LG Electronics |
| Wysiwyg Studios |
LG Electronics and Wysiwyg Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and Wysiwyg Studios
The main advantage of trading using opposite LG Electronics and Wysiwyg Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, Wysiwyg Studios can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wysiwyg Studios will offset losses from the drop in Wysiwyg Studios' long position.| LG Electronics vs. AptaBio Therapeutics | LG Electronics vs. Daewoo SBI SPAC | LG Electronics vs. Dream Security co | LG Electronics vs. Microfriend |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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