Correlation Between Tamul Multimedia and LG Household
Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and LG Household 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 Tamul Multimedia and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamul Multimedia Co and LG Household Healthcare, you can compare the effects of market volatilities on Tamul Multimedia and LG Household 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 Tamul Multimedia with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamul Multimedia and LG Household.
Diversification Opportunities for Tamul Multimedia and LG Household
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tamul and 051900 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and LG Household Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Household Healthcare and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with LG Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Household Healthcare has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and LG Household go up and down completely randomly.
Pair Corralation between Tamul Multimedia and LG Household
Assuming the 90 days trading horizon Tamul Multimedia Co is expected to generate 4.89 times more return on investment than LG Household. However, Tamul Multimedia is 4.89 times more volatile than LG Household Healthcare. It trades about 0.02 of its potential returns per unit of risk. LG Household Healthcare is currently generating about -0.03 per unit of risk. If you would invest 376,000 in Tamul Multimedia Co on December 26, 2024 and sell it today you would earn a total of 0.00 from holding Tamul Multimedia Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamul Multimedia Co vs. LG Household Healthcare
Performance |
| Timeline |
| Tamul Multimedia |
| LG Household Healthcare |
Tamul Multimedia and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamul Multimedia and LG Household
The main advantage of trading using opposite Tamul Multimedia and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamul Multimedia position performs unexpectedly, LG Household 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 Household will offset losses from the drop in LG Household's long position.| Tamul Multimedia vs. Daesung Industrial Co | Tamul Multimedia vs. Jeil Steel Mfg | Tamul Multimedia vs. Finebesteel | Tamul Multimedia vs. MetaLabs Co |
| LG Household vs. Homecast CoLtd | LG Household vs. Hanwha Chemical Corp | LG Household vs. Home Center Holdings | LG Household vs. Cuckoo Homesys 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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