Correlation Between LIG-ES SPAC and Youngchang Chemical
Can any of the company-specific risk be diversified away by investing in both LIG-ES SPAC and Youngchang Chemical 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 LIG-ES SPAC and Youngchang Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIG ES SPAC and Youngchang Chemical Co, you can compare the effects of market volatilities on LIG-ES SPAC and Youngchang Chemical 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 LIG-ES SPAC with a short position of Youngchang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIG-ES SPAC and Youngchang Chemical.
Diversification Opportunities for LIG-ES SPAC and Youngchang Chemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIG-ES and Youngchang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding LIG ES SPAC and Youngchang Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngchang Chemical and LIG-ES SPAC 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 LIG ES SPAC are associated (or correlated) with Youngchang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngchang Chemical has no effect on the direction of LIG-ES SPAC i.e., LIG-ES SPAC and Youngchang Chemical go up and down completely randomly.
Pair Corralation between LIG-ES SPAC and Youngchang Chemical
Assuming the 90 days trading horizon LIG ES SPAC is expected to under-perform the Youngchang Chemical. But the stock apears to be less risky and, when comparing its historical volatility, LIG ES SPAC is 1.18 times less risky than Youngchang Chemical. The stock trades about -0.22 of its potential returns per unit of risk. The Youngchang Chemical Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,364,000 in Youngchang Chemical Co on September 13, 2024 and sell it today you would lose (108,000) from holding Youngchang Chemical Co or give up 7.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIG ES SPAC vs. Youngchang Chemical Co
Performance |
| Timeline |
| LIG ES SPAC |
| Youngchang Chemical |
LIG-ES SPAC and Youngchang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIG-ES SPAC and Youngchang Chemical
The main advantage of trading using opposite LIG-ES SPAC and Youngchang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIG-ES SPAC position performs unexpectedly, Youngchang Chemical 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 Youngchang Chemical will offset losses from the drop in Youngchang Chemical's long position.| LIG-ES SPAC vs. Hyundai Green Food | LIG-ES SPAC vs. Samlip General Foods | LIG-ES SPAC vs. Stic Investments | LIG-ES SPAC vs. Samyang Foods Co |
| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. LIG ES SPAC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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