Correlation Between INNOX Advanced and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and LG Chemicals 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 INNOX Advanced and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and LG Chemicals, you can compare the effects of market volatilities on INNOX Advanced and LG Chemicals 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 INNOX Advanced with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and LG Chemicals.
Diversification Opportunities for INNOX Advanced and LG Chemicals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INNOX and 051910 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and INNOX Advanced 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 INNOX Advanced Materials are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and LG Chemicals go up and down completely randomly.
Pair Corralation between INNOX Advanced and LG Chemicals
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.18 times more return on investment than LG Chemicals. However, INNOX Advanced is 1.18 times more volatile than LG Chemicals. It trades about 0.0 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.06 per unit of risk. If you would invest 2,866,466 in INNOX Advanced Materials on August 27, 2024 and sell it today you would lose (611,466) from holding INNOX Advanced Materials or give up 21.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. LG Chemicals
Performance |
| Timeline |
| INNOX Advanced Materials |
| LG Chemicals |
INNOX Advanced and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and LG Chemicals
The main advantage of trading using opposite INNOX Advanced and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, LG Chemicals 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 Chemicals will offset losses from the drop in LG Chemicals' long position.| INNOX Advanced vs. Dongsin Engineering Construction | INNOX Advanced vs. QUALITAS SEMICONDUCTOR LTD | INNOX Advanced vs. Seoul Semiconductor Co | INNOX Advanced vs. Jeju Semiconductor Corp |
| LG Chemicals vs. National Plastic Co | LG Chemicals vs. Korea Petro Chemical | LG Chemicals vs. Ssangyong Materials Corp | LG Chemicals vs. INNOX Advanced Materials |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |