Correlation Between E Investment and LG Chem
Can any of the company-specific risk be diversified away by investing in both E Investment and LG Chem 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 E Investment and LG Chem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Investment Development and LG Chem, you can compare the effects of market volatilities on E Investment and LG Chem 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 E Investment with a short position of LG Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Investment and LG Chem.
Diversification Opportunities for E Investment and LG Chem
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 093230 and 051915 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development and LG Chem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chem and E Investment 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 E Investment Development are associated (or correlated) with LG Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chem has no effect on the direction of E Investment i.e., E Investment and LG Chem go up and down completely randomly.
Pair Corralation between E Investment and LG Chem
If you would invest 139,200 in E Investment Development on August 25, 2024 and sell it today you would earn a total of 0.00 from holding E Investment Development or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
E Investment Development vs. LG Chem
Performance |
| Timeline |
| E Investment Development |
| LG Chem |
E Investment and LG Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Investment and LG Chem
The main advantage of trading using opposite E Investment and LG Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment position performs unexpectedly, LG Chem 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 Chem will offset losses from the drop in LG Chem's long position.| E Investment vs. Korea Real Estate | E Investment vs. Korea Ratings Co | E Investment vs. IQuest Co | E Investment vs. Wonbang Tech Co |
| LG Chem vs. E Investment Development | LG Chem vs. Dongbang Transport Logistics | LG Chem vs. Heungkuk Metaltech CoLtd | LG Chem vs. Choil Aluminum |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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