Correlation Between Derkwoo Electronics and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Derkwoo Electronics and LG Electronics 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 Derkwoo Electronics and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derkwoo Electronics Co and LG Electronics, you can compare the effects of market volatilities on Derkwoo Electronics and LG Electronics 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 Derkwoo Electronics with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derkwoo Electronics and LG Electronics.
Diversification Opportunities for Derkwoo Electronics and LG Electronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Derkwoo and 066570 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Derkwoo Electronics Co and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and Derkwoo Electronics 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 Derkwoo Electronics Co are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Derkwoo Electronics i.e., Derkwoo Electronics and LG Electronics go up and down completely randomly.
Pair Corralation between Derkwoo Electronics and LG Electronics
Assuming the 90 days trading horizon Derkwoo Electronics Co is expected to under-perform the LG Electronics. In addition to that, Derkwoo Electronics is 1.74 times more volatile than LG Electronics. It trades about -0.05 of its total potential returns per unit of risk. LG Electronics is currently generating about 0.08 per unit of volatility. If you would invest 9,240,000 in LG Electronics on August 29, 2024 and sell it today you would earn a total of 210,000 from holding LG Electronics or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derkwoo Electronics Co vs. LG Electronics
Performance |
| Timeline |
| Derkwoo Electronics |
| LG Electronics |
Derkwoo Electronics and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derkwoo Electronics and LG Electronics
The main advantage of trading using opposite Derkwoo Electronics and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derkwoo Electronics position performs unexpectedly, LG Electronics 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 Electronics will offset losses from the drop in LG Electronics' long position.| Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. LG Energy Solution | Derkwoo Electronics vs. SK Hynix |
| LG Electronics vs. AptaBio Therapeutics | LG Electronics vs. Daewoo SBI SPAC | LG Electronics vs. Dream Security co | LG Electronics vs. Microfriend |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |