Correlation Between MOVIE GAMES and LG Electronics
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES 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 MOVIE GAMES and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and LG Electronics, you can compare the effects of market volatilities on MOVIE GAMES 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 MOVIE GAMES with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and LG Electronics.
Diversification Opportunities for MOVIE GAMES and LG Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOVIE and LGLG is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and MOVIE GAMES 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 MOVIE GAMES SA 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 MOVIE GAMES i.e., MOVIE GAMES and LG Electronics go up and down completely randomly.
Pair Corralation between MOVIE GAMES and LG Electronics
Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the LG Electronics. In addition to that, MOVIE GAMES is 1.29 times more volatile than LG Electronics. It trades about -0.14 of its total potential returns per unit of risk. LG Electronics is currently generating about -0.03 per unit of volatility. If you would invest 1,470 in LG Electronics on August 29, 2024 and sell it today you would lose (20.00) from holding LG Electronics or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. LG Electronics
Performance |
| Timeline |
| MOVIE GAMES SA |
| LG Electronics |
MOVIE GAMES and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and LG Electronics
The main advantage of trading using opposite MOVIE GAMES and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES 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.| MOVIE GAMES vs. Merit Medical Systems | MOVIE GAMES vs. QURATE RETAIL INC | MOVIE GAMES vs. Microbot Medical | MOVIE GAMES vs. Ross Stores |
| LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc |
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
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |