Correlation Between Hyosung Heavy and LG Energy
Can any of the company-specific risk be diversified away by investing in both Hyosung Heavy and LG Energy 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 Heavy and LG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Heavy Industries and LG Energy Solution, you can compare the effects of market volatilities on Hyosung Heavy and LG Energy 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 Heavy with a short position of LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Heavy and LG Energy.
Diversification Opportunities for Hyosung Heavy and LG Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyosung and 373220 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Heavy Industries and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution and Hyosung Heavy 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 Heavy Industries are associated (or correlated) with LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Hyosung Heavy i.e., Hyosung Heavy and LG Energy go up and down completely randomly.
Pair Corralation between Hyosung Heavy and LG Energy
Assuming the 90 days trading horizon Hyosung Heavy Industries is expected to generate 0.97 times more return on investment than LG Energy. However, Hyosung Heavy Industries is 1.04 times less risky than LG Energy. It trades about 0.03 of its potential returns per unit of risk. LG Energy Solution is currently generating about -0.05 per unit of risk. If you would invest 40,100,000 in Hyosung Heavy Industries on September 1, 2024 and sell it today you would earn a total of 250,000 from holding Hyosung Heavy Industries or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyosung Heavy Industries vs. LG Energy Solution
Performance |
| Timeline |
| Hyosung Heavy Industries |
| LG Energy Solution |
Hyosung Heavy and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Heavy and LG Energy
The main advantage of trading using opposite Hyosung Heavy and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Heavy position performs unexpectedly, LG Energy 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 Energy will offset losses from the drop in LG Energy's long position.| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. SNTEnergy Co |
| LG Energy vs. Doosan Heavy Ind | LG Energy vs. Hyosung Heavy Industries | LG Energy vs. Aprogen KIC | LG Energy vs. SNTEnergy 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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