Correlation Between LG Electronics and Wireless Power
Can any of the company-specific risk be diversified away by investing in both LG Electronics and Wireless Power 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 Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics Pfd and Wireless Power Amplifier, you can compare the effects of market volatilities on LG Electronics and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and Wireless Power.
Diversification Opportunities for LG Electronics and Wireless Power
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 066575 and Wireless is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics Pfd and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Pfd are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of LG Electronics i.e., LG Electronics and Wireless Power go up and down completely randomly.
Pair Corralation between LG Electronics and Wireless Power
Assuming the 90 days trading horizon LG Electronics Pfd is expected to generate 0.8 times more return on investment than Wireless Power. However, LG Electronics Pfd is 1.24 times less risky than Wireless Power. It trades about -0.13 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.42 per unit of risk. If you would invest 4,700,000 in LG Electronics Pfd on August 27, 2024 and sell it today you would lose (195,000) from holding LG Electronics Pfd or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Electronics Pfd vs. Wireless Power Amplifier
Performance |
| Timeline |
| LG Electronics Pfd |
| Wireless Power Amplifier |
LG Electronics and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and Wireless Power
The main advantage of trading using opposite LG Electronics and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| LG Electronics vs. AptaBio Therapeutics | LG Electronics vs. Daewoo SBI SPAC | LG Electronics vs. Dream Security co | LG Electronics vs. Microfriend |
| Wireless Power vs. CU Medical Systems | Wireless Power vs. Nable Communications | Wireless Power vs. Samsung Electronics Co | Wireless Power vs. Shinsegae Information Communication |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |