Correlation Between Dgb Financial and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Dgb Financial 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 Dgb Financial and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and LG Uplus, you can compare the effects of market volatilities on Dgb Financial 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 Dgb Financial with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and LG Uplus.
Diversification Opportunities for Dgb Financial and LG Uplus
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dgb and 032640 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Dgb Financial 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 Dgb Financial 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 Dgb Financial i.e., Dgb Financial and LG Uplus go up and down completely randomly.
Pair Corralation between Dgb Financial and LG Uplus
Assuming the 90 days trading horizon Dgb Financial is expected to under-perform the LG Uplus. In addition to that, Dgb Financial is 1.17 times more volatile than LG Uplus. It trades about -0.12 of its total potential returns per unit of risk. LG Uplus is currently generating about -0.08 per unit of volatility. If you would invest 1,078,000 in LG Uplus on October 11, 2024 and sell it today you would lose (24,000) from holding LG Uplus or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Dgb Financial vs. LG Uplus
Performance |
| Timeline |
| Dgb Financial |
| LG Uplus |
Dgb Financial and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and LG Uplus
The main advantage of trading using opposite Dgb Financial and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial 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.| Dgb Financial vs. Automobile Pc | Dgb Financial vs. Ssangyong Information Communication | Dgb Financial vs. Han Kook Steel | Dgb Financial vs. INSUN Environmental New |
| LG Uplus vs. Lotte Data Communication | LG Uplus vs. Woori Financial Group | LG Uplus vs. Dgb Financial | LG Uplus vs. KakaoBank Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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