Correlation Between Sungchang Autotech and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and LG Chemicals 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 Sungchang Autotech and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and LG Chemicals, you can compare the effects of market volatilities on Sungchang Autotech and LG Chemicals 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 Sungchang Autotech with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and LG Chemicals.
Diversification Opportunities for Sungchang Autotech and LG Chemicals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sungchang and 051910 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and Sungchang Autotech 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 Sungchang Autotech Co are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and LG Chemicals go up and down completely randomly.
Pair Corralation between Sungchang Autotech and LG Chemicals
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 0.79 times more return on investment than LG Chemicals. However, Sungchang Autotech Co is 1.26 times less risky than LG Chemicals. It trades about -0.06 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.1 per unit of risk. If you would invest 645,939 in Sungchang Autotech Co on September 2, 2024 and sell it today you would lose (261,439) from holding Sungchang Autotech Co or give up 40.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. LG Chemicals
Performance |
| Timeline |
| Sungchang Autotech |
| LG Chemicals |
Sungchang Autotech and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and LG Chemicals
The main advantage of trading using opposite Sungchang Autotech and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, LG Chemicals 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 Chemicals will offset losses from the drop in LG Chemicals' long position.| Sungchang Autotech vs. LG Display | Sungchang Autotech vs. Hyundai Motor Co | Sungchang Autotech vs. Hyundai Motor Co | Sungchang Autotech vs. Adaptive Plasma Technology |
| LG Chemicals vs. POSCO Holdings | LG Chemicals vs. Hanwha Solutions | LG Chemicals vs. Hyundai Steel | LG Chemicals vs. Ecopro Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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