Correlation Between Hyosung Chemical and LIG-ES SPAC
Can any of the company-specific risk be diversified away by investing in both Hyosung Chemical and LIG-ES SPAC 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 Hyosung Chemical and LIG-ES SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Chemical Corp and LIG ES SPAC, you can compare the effects of market volatilities on Hyosung Chemical and LIG-ES SPAC 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 Hyosung Chemical with a short position of LIG-ES SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Chemical and LIG-ES SPAC.
Diversification Opportunities for Hyosung Chemical and LIG-ES SPAC
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyosung and LIG-ES is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Chemical Corp and LIG ES SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIG ES SPAC and Hyosung Chemical 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 Hyosung Chemical Corp are associated (or correlated) with LIG-ES SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIG ES SPAC has no effect on the direction of Hyosung Chemical i.e., Hyosung Chemical and LIG-ES SPAC go up and down completely randomly.
Pair Corralation between Hyosung Chemical and LIG-ES SPAC
Assuming the 90 days trading horizon Hyosung Chemical Corp is expected to generate 2.3 times more return on investment than LIG-ES SPAC. However, Hyosung Chemical is 2.3 times more volatile than LIG ES SPAC. It trades about 0.1 of its potential returns per unit of risk. LIG ES SPAC is currently generating about -0.32 per unit of risk. If you would invest 3,580,000 in Hyosung Chemical Corp on September 12, 2024 and sell it today you would earn a total of 425,000 from holding Hyosung Chemical Corp or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Chemical Corp vs. LIG ES SPAC
Performance |
| Timeline |
| Hyosung Chemical Corp |
| LIG ES SPAC |
Hyosung Chemical and LIG-ES SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Chemical and LIG-ES SPAC
The main advantage of trading using opposite Hyosung Chemical and LIG-ES SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Chemical position performs unexpectedly, LIG-ES SPAC 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 LIG-ES SPAC will offset losses from the drop in LIG-ES SPAC's long position.| Hyosung Chemical vs. LG Chem | Hyosung Chemical vs. Chunbo Co | Hyosung Chemical vs. DukSan Neolux CoLtd | Hyosung Chemical vs. LIG ES SPAC |
| LIG-ES SPAC vs. LG Chem | LIG-ES SPAC vs. Chunbo Co | LIG-ES SPAC vs. DukSan Neolux CoLtd | LIG-ES SPAC vs. Hyosung Chemical Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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