Correlation Between LG Energy and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both LG Energy and Sangsangin Investment 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 LG Energy and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Energy Solution and Sangsangin Investment Securities, you can compare the effects of market volatilities on LG Energy and Sangsangin Investment 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 LG Energy with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Sangsangin Investment.
Diversification Opportunities for LG Energy and Sangsangin Investment
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 373220 and Sangsangin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and LG Energy 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 LG Energy Solution are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of LG Energy i.e., LG Energy and Sangsangin Investment go up and down completely randomly.
Pair Corralation between LG Energy and Sangsangin Investment
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 1.45 times more return on investment than Sangsangin Investment. However, LG Energy is 1.45 times more volatile than Sangsangin Investment Securities. It trades about -0.02 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.08 per unit of risk. If you would invest 55,000,000 in LG Energy Solution on September 1, 2024 and sell it today you would lose (16,850,000) from holding LG Energy Solution or give up 30.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| LG Energy Solution |
| Sangsangin Investment |
LG Energy and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Sangsangin Investment
The main advantage of trading using opposite LG Energy and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| LG Energy vs. Doosan Heavy Ind | LG Energy vs. Hyosung Heavy Industries | LG Energy vs. Aprogen KIC | LG Energy vs. SNTEnergy Co |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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