Correlation Between Hurum and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Hurum and LG Uplus 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 Hurum and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and LG Uplus, you can compare the effects of market volatilities on Hurum and LG Uplus 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 Hurum with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and LG Uplus.
Diversification Opportunities for Hurum and LG Uplus
Pay attention - limited upside
The 3 months correlation between Hurum and 032640 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Hurum 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 Hurum Co are associated (or correlated) with LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of Hurum i.e., Hurum and LG Uplus go up and down completely randomly.
Pair Corralation between Hurum and LG Uplus
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the LG Uplus. In addition to that, Hurum is 1.39 times more volatile than LG Uplus. It trades about -0.09 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.07 per unit of volatility. If you would invest 983,000 in LG Uplus on October 17, 2024 and sell it today you would earn a total of 55,000 from holding LG Uplus or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. LG Uplus
Performance |
| Timeline |
| Hurum |
| LG Uplus |
Hurum and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and LG Uplus
The main advantage of trading using opposite Hurum and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, LG Uplus 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 Uplus will offset losses from the drop in LG Uplus' long position.| Hurum vs. Korea Electronic Certification | Hurum vs. CU Medical Systems | Hurum vs. Daishin Information Communications | Hurum vs. Shinil Electronics Co |
| LG Uplus vs. Xavis Co | LG Uplus vs. Hurum Co | LG Uplus vs. Daishin Balance No8 | LG Uplus vs. Korea Real Estate |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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