Correlation Between ABOV Semiconductor and LG Uplus
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and LG Uplus 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 ABOV Semiconductor and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and LG Uplus, you can compare the effects of market volatilities on ABOV Semiconductor and LG Uplus 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 ABOV Semiconductor with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and LG Uplus.
Diversification Opportunities for ABOV Semiconductor and LG Uplus
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABOV and 032640 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and ABOV Semiconductor 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 ABOV Semiconductor Co are associated (or correlated) with LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and LG Uplus go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and LG Uplus
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to under-perform the LG Uplus. In addition to that, ABOV Semiconductor is 1.55 times more volatile than LG Uplus. It trades about -0.4 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.4 per unit of volatility. If you would invest 1,006,000 in LG Uplus on September 5, 2024 and sell it today you would earn a total of 146,000 from holding LG Uplus or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. LG Uplus
Performance |
| Timeline |
| ABOV Semiconductor |
| LG Uplus |
ABOV Semiconductor and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and LG Uplus
The main advantage of trading using opposite ABOV Semiconductor and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, LG Uplus 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 Uplus will offset losses from the drop in LG Uplus' long position.| ABOV Semiconductor vs. Dongsin Engineering Construction | ABOV Semiconductor vs. Doosan Fuel Cell | ABOV Semiconductor vs. Daishin Balance 1 | ABOV Semiconductor vs. Total Soft Bank |
| LG Uplus vs. NH Investment Securities | LG Uplus vs. Nh Investment And | LG Uplus vs. SV Investment | LG Uplus vs. DB Financial Investment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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