Correlation Between TS Investment and LG Chem
Can any of the company-specific risk be diversified away by investing in both TS Investment 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 TS Investment and LG Chem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TS Investment Corp and LG Chem, you can compare the effects of market volatilities on TS Investment 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 TS Investment with a short position of LG Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and LG Chem.
Diversification Opportunities for TS Investment and LG Chem
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between 246690 and 051915 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and LG Chem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chem and TS Investment 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 TS Investment Corp 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 TS Investment i.e., TS Investment and LG Chem go up and down completely randomly.
Pair Corralation between TS Investment and LG Chem
Assuming the 90 days trading horizon TS Investment Corp is expected to generate 1.45 times more return on investment than LG Chem. However, TS Investment is 1.45 times more volatile than LG Chem. It trades about 0.01 of its potential returns per unit of risk. LG Chem is currently generating about -0.25 per unit of risk. If you would invest 99,300 in TS Investment Corp on October 26, 2024 and sell it today you would lose (3,000) from holding TS Investment Corp or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TS Investment Corp vs. LG Chem
Performance |
| Timeline |
| TS Investment Corp |
| LG Chem |
TS Investment and LG Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TS Investment and LG Chem
The main advantage of trading using opposite TS Investment and LG Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TS Investment 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.| TS Investment vs. SBI Investment KOREA | TS Investment vs. PI Advanced Materials | TS Investment vs. Korea Shipbuilding Offshore | TS Investment vs. Nh Investment And |
| LG Chem vs. TK Chemical | LG Chem vs. Neungyule Education | LG Chem vs. TS Investment Corp | LG Chem vs. Korea Petro Chemical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |