Correlation Between PI Advanced and LG Uplus
Can any of the company-specific risk be diversified away by investing in both PI Advanced 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 PI Advanced and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and LG Uplus, you can compare the effects of market volatilities on PI Advanced 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 PI Advanced with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and LG Uplus.
Diversification Opportunities for PI Advanced and LG Uplus
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 178920 and 032640 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and PI Advanced 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 PI Advanced Materials 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 PI Advanced i.e., PI Advanced and LG Uplus go up and down completely randomly.
Pair Corralation between PI Advanced and LG Uplus
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the LG Uplus. In addition to that, PI Advanced is 3.18 times more volatile than LG Uplus. It trades about -0.02 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.01 per unit of volatility. If you would invest 1,049,187 in LG Uplus on October 11, 2024 and sell it today you would earn a total of 4,813 from holding LG Uplus or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. LG Uplus
Performance |
| Timeline |
| PI Advanced Materials |
| LG Uplus |
PI Advanced and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and LG Uplus
The main advantage of trading using opposite PI Advanced and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced 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.| PI Advanced vs. Choil Aluminum | PI Advanced vs. Sungmoon Electronics Co | PI Advanced vs. Wave Electronics Co | PI Advanced vs. Samwha Electronics Co |
| LG Uplus vs. KB Financial Group | LG Uplus vs. BNK Financial Group | LG Uplus vs. DB Insurance Co | LG Uplus vs. Lotte Non Life Insurance |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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