Correlation Between Daejung Chemicals and LG Energy
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and LG Energy 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 Daejung Chemicals and LG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and LG Energy Solution, you can compare the effects of market volatilities on Daejung Chemicals and LG Energy 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 Daejung Chemicals with a short position of LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and LG Energy.
Diversification Opportunities for Daejung Chemicals and LG Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daejung and 373220 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution and Daejung Chemicals 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 Daejung Chemicals Metals are associated (or correlated) with LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and LG Energy go up and down completely randomly.
Pair Corralation between Daejung Chemicals and LG Energy
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 0.66 times more return on investment than LG Energy. However, Daejung Chemicals Metals is 1.52 times less risky than LG Energy. It trades about 0.06 of its potential returns per unit of risk. LG Energy Solution is currently generating about 0.0 per unit of risk. If you would invest 1,264,000 in Daejung Chemicals Metals on September 14, 2024 and sell it today you would earn a total of 32,000 from holding Daejung Chemicals Metals or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. LG Energy Solution
Performance |
| Timeline |
| Daejung Chemicals Metals |
| LG Energy Solution |
Daejung Chemicals and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and LG Energy
The main advantage of trading using opposite Daejung Chemicals and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, LG Energy 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 Energy will offset losses from the drop in LG Energy's long position.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. Chunbo Co | Daejung Chemicals vs. DukSan Neolux CoLtd | Daejung Chemicals vs. LIG ES SPAC |
| LG Energy vs. Samyang Foods Co | LG Energy vs. FoodNamoo | LG Energy vs. PNC Technologies co | LG Energy vs. Lion Chemtech 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |