Correlation Between Kaonmedia and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and LG Electronics 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 Kaonmedia and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaonmedia Co and LG Electronics Pfd, you can compare the effects of market volatilities on Kaonmedia and LG Electronics 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 Kaonmedia with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and LG Electronics.
Diversification Opportunities for Kaonmedia and LG Electronics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaonmedia and 066575 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and LG Electronics Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics Pfd and Kaonmedia 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 Kaonmedia Co are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics Pfd has no effect on the direction of Kaonmedia i.e., Kaonmedia and LG Electronics go up and down completely randomly.
Pair Corralation between Kaonmedia and LG Electronics
Assuming the 90 days trading horizon Kaonmedia Co is expected to under-perform the LG Electronics. In addition to that, Kaonmedia is 2.31 times more volatile than LG Electronics Pfd. It trades about -0.02 of its total potential returns per unit of risk. LG Electronics Pfd is currently generating about 0.01 per unit of volatility. If you would invest 4,390,251 in LG Electronics Pfd on August 25, 2024 and sell it today you would earn a total of 114,749 from holding LG Electronics Pfd or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. LG Electronics Pfd
Performance |
| Timeline |
| Kaonmedia |
| LG Electronics Pfd |
Kaonmedia and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and LG Electronics
The main advantage of trading using opposite Kaonmedia and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| Kaonmedia vs. Konan Technology | Kaonmedia vs. Samji Electronics Co | Kaonmedia vs. SK Chemicals Co | Kaonmedia vs. Ilji Technology Co |
| LG Electronics vs. SBI Investment KOREA | LG Electronics vs. Nh Investment And | LG Electronics vs. LB Investment | LG Electronics vs. Lindeman Asia Investment |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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