Correlation Between Kaonmedia and LG Energy
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and LG Energy 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 Energy 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 Energy Solution, you can compare the effects of market volatilities on Kaonmedia and LG Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and LG Energy.
Diversification Opportunities for Kaonmedia and LG Energy
Weak diversification
The 3 months correlation between Kaonmedia and 373220 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Kaonmedia i.e., Kaonmedia and LG Energy go up and down completely randomly.
Pair Corralation between Kaonmedia and LG Energy
Assuming the 90 days trading horizon Kaonmedia Co is expected to under-perform the LG Energy. In addition to that, Kaonmedia is 1.2 times more volatile than LG Energy Solution. It trades about -0.12 of its total potential returns per unit of risk. LG Energy Solution is currently generating about -0.08 per unit of volatility. If you would invest 41,600,000 in LG Energy Solution on September 12, 2024 and sell it today you would lose (3,100,000) from holding LG Energy Solution or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. LG Energy Solution
Performance |
| Timeline |
| Kaonmedia |
| LG Energy Solution |
Kaonmedia and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and LG Energy
The main advantage of trading using opposite Kaonmedia and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, LG Energy 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 Energy will offset losses from the drop in LG Energy's long position.| Kaonmedia vs. Shinsegae Food | Kaonmedia vs. BGF Retail Co | Kaonmedia vs. Mgame Corp | Kaonmedia vs. Netmarble Games Corp |
| LG Energy vs. Bohae Brewery | LG Energy vs. Hanjin Transportation Co | LG Energy vs. Daehan Steel | LG Energy vs. Lotte Chilsung Beverage |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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