Correlation Between LIG ES and Sukgyung
Can any of the company-specific risk be diversified away by investing in both LIG ES and Sukgyung 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 and Sukgyung 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 Sukgyung AT Co, you can compare the effects of market volatilities on LIG ES and Sukgyung 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 with a short position of Sukgyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIG ES and Sukgyung.
Diversification Opportunities for LIG ES and Sukgyung
Very poor diversification
The 3 months correlation between LIG and Sukgyung is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding LIG ES SPAC and Sukgyung AT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sukgyung AT and LIG ES 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 Sukgyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sukgyung AT has no effect on the direction of LIG ES i.e., LIG ES and Sukgyung go up and down completely randomly.
Pair Corralation between LIG ES and Sukgyung
Assuming the 90 days trading horizon LIG ES SPAC is expected to under-perform the Sukgyung. In addition to that, LIG ES is 1.72 times more volatile than Sukgyung AT Co. It trades about -0.29 of its total potential returns per unit of risk. Sukgyung AT Co is currently generating about -0.37 per unit of volatility. If you would invest 4,570,000 in Sukgyung AT Co on August 29, 2024 and sell it today you would lose (670,000) from holding Sukgyung AT Co or give up 14.66% 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. Sukgyung AT Co
Performance |
| Timeline |
| LIG ES SPAC |
| Sukgyung AT |
LIG ES and Sukgyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIG ES and Sukgyung
The main advantage of trading using opposite LIG ES and Sukgyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIG ES position performs unexpectedly, Sukgyung 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 Sukgyung will offset losses from the drop in Sukgyung's long position.| LIG ES vs. FNSTech Co | LIG ES vs. Hyunwoo Industrial Co | LIG ES vs. Pyung Hwa Industrial | LIG ES vs. RFTech Co |
| Sukgyung vs. LG Electronics Pfd | Sukgyung vs. KG Eco Technology | Sukgyung vs. Samji Electronics Co | Sukgyung vs. Daeduck Electronics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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