Correlation Between Taewoong Logistics and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics 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 Taewoong Logistics and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taewoong Logistics CoLtd and LG Uplus, you can compare the effects of market volatilities on Taewoong Logistics 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 Taewoong Logistics with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and LG Uplus.
Diversification Opportunities for Taewoong Logistics and LG Uplus
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taewoong and 032640 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Taewoong Logistics 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 Taewoong Logistics CoLtd 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 Taewoong Logistics i.e., Taewoong Logistics and LG Uplus go up and down completely randomly.
Pair Corralation between Taewoong Logistics and LG Uplus
Assuming the 90 days trading horizon Taewoong Logistics is expected to generate 11.92 times less return on investment than LG Uplus. In addition to that, Taewoong Logistics is 3.6 times more volatile than LG Uplus. It trades about 0.0 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.09 per unit of volatility. If you would invest 966,414 in LG Uplus on September 4, 2024 and sell it today you would earn a total of 185,586 from holding LG Uplus or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taewoong Logistics CoLtd vs. LG Uplus
Performance |
| Timeline |
| Taewoong Logistics CoLtd |
| LG Uplus |
Taewoong Logistics and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taewoong Logistics and LG Uplus
The main advantage of trading using opposite Taewoong Logistics and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taewoong Logistics 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.| Taewoong Logistics vs. LG Uplus | Taewoong Logistics vs. ASTORY CoLtd | Taewoong Logistics vs. AnterogenCoLtd | Taewoong Logistics vs. Industrial Bank |
| LG Uplus vs. Jeju Semiconductor Corp | LG Uplus vs. LS Materials | LG Uplus vs. Union Materials Corp | LG Uplus vs. ABOV Semiconductor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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