Correlation Between Puloon Technology and LG Household
Can any of the company-specific risk be diversified away by investing in both Puloon Technology 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 Puloon Technology and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puloon Technology and LG Household Healthcare, you can compare the effects of market volatilities on Puloon Technology 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 Puloon Technology with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puloon Technology and LG Household.
Diversification Opportunities for Puloon Technology and LG Household
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Puloon and 051900 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Puloon Technology 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 Puloon Technology 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 Puloon Technology 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 Puloon Technology i.e., Puloon Technology and LG Household go up and down completely randomly.
Pair Corralation between Puloon Technology and LG Household
Assuming the 90 days trading horizon Puloon Technology is expected to generate 0.76 times more return on investment than LG Household. However, Puloon Technology is 1.32 times less risky than LG Household. It trades about -0.12 of its potential returns per unit of risk. LG Household Healthcare is currently generating about -0.14 per unit of risk. If you would invest 665,000 in Puloon Technology on August 29, 2024 and sell it today you would lose (63,000) from holding Puloon Technology or give up 9.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puloon Technology vs. LG Household Healthcare
Performance |
| Timeline |
| Puloon Technology |
| LG Household Healthcare |
Puloon Technology and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puloon Technology and LG Household
The main advantage of trading using opposite Puloon Technology and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puloon Technology 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.| Puloon Technology vs. Daou Data Corp | Puloon Technology vs. Busan Industrial Co | Puloon Technology vs. Busan Ind | Puloon Technology vs. Shinhan WTI Futures |
| LG Household vs. Samsung Electronics Co | LG Household vs. Samsung Electronics Co | LG Household vs. Hyundai Motor Co | LG Household vs. Hyundai Motor |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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