Correlation Between Aprogen Healthcare and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare 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 Aprogen Healthcare and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and LG Uplus, you can compare the effects of market volatilities on Aprogen Healthcare 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 Aprogen Healthcare with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and LG Uplus.
Diversification Opportunities for Aprogen Healthcare and LG Uplus
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aprogen and 032640 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Aprogen Healthcare 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 Aprogen Healthcare Games 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 Aprogen Healthcare i.e., Aprogen Healthcare and LG Uplus go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and LG Uplus
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the LG Uplus. In addition to that, Aprogen Healthcare is 4.0 times more volatile than LG Uplus. It trades about -0.03 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.04 per unit of volatility. If you would invest 970,163 in LG Uplus on October 11, 2024 and sell it today you would earn a total of 83,837 from holding LG Uplus or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. LG Uplus
Performance |
| Timeline |
| Aprogen Healthcare Games |
| LG Uplus |
Aprogen Healthcare and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and LG Uplus
The main advantage of trading using opposite Aprogen Healthcare and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare 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.The idea behind Aprogen Healthcare Games and LG Uplus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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