Correlation Between DukSan Neolux and LG Chem
Can any of the company-specific risk be diversified away by investing in both DukSan Neolux and LG Chem 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 DukSan Neolux and LG Chem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DukSan Neolux CoLtd and LG Chem, you can compare the effects of market volatilities on DukSan Neolux and LG Chem 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 DukSan Neolux with a short position of LG Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of DukSan Neolux and LG Chem.
Diversification Opportunities for DukSan Neolux and LG Chem
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DukSan and 051915 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding DukSan Neolux CoLtd and LG Chem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chem and DukSan Neolux 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 DukSan Neolux CoLtd are associated (or correlated) with LG Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chem has no effect on the direction of DukSan Neolux i.e., DukSan Neolux and LG Chem go up and down completely randomly.
Pair Corralation between DukSan Neolux and LG Chem
Assuming the 90 days trading horizon DukSan Neolux CoLtd is expected to generate 1.45 times more return on investment than LG Chem. However, DukSan Neolux is 1.45 times more volatile than LG Chem. It trades about 0.05 of its potential returns per unit of risk. LG Chem is currently generating about -0.23 per unit of risk. If you would invest 2,775,000 in DukSan Neolux CoLtd on October 29, 2024 and sell it today you would earn a total of 55,000 from holding DukSan Neolux CoLtd or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DukSan Neolux CoLtd vs. LG Chem
Performance |
| Timeline |
| DukSan Neolux CoLtd |
| LG Chem |
DukSan Neolux and LG Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DukSan Neolux and LG Chem
The main advantage of trading using opposite DukSan Neolux and LG Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DukSan Neolux position performs unexpectedly, LG Chem 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 Chem will offset losses from the drop in LG Chem's long position.| DukSan Neolux vs. PNC Technologies co | DukSan Neolux vs. E Investment Development | DukSan Neolux vs. DB Financial Investment | DukSan Neolux vs. Narae Nanotech Corp |
| LG Chem vs. Ssangyong Information Communication | LG Chem vs. Atinum Investment Co | LG Chem vs. Koryo Credit Information | LG Chem vs. Daol Investment Securities |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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