Correlation Between Innometry and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Innometry 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 Innometry and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and LG Electronics, you can compare the effects of market volatilities on Innometry 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 Innometry with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and LG Electronics.
Diversification Opportunities for Innometry and LG Electronics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innometry and 066570 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and Innometry 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 Innometry 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 Innometry i.e., Innometry and LG Electronics go up and down completely randomly.
Pair Corralation between Innometry and LG Electronics
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the LG Electronics. In addition to that, Innometry is 1.49 times more volatile than LG Electronics. It trades about -0.02 of its total potential returns per unit of risk. LG Electronics is currently generating about 0.02 per unit of volatility. If you would invest 8,957,057 in LG Electronics on August 28, 2024 and sell it today you would earn a total of 462,943 from holding LG Electronics or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. LG Electronics
Performance |
| Timeline |
| Innometry |
| LG Electronics |
Innometry and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and LG Electronics
The main advantage of trading using opposite Innometry and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry 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.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |