Correlation Between LG Energy and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both LG Energy and Mirae Asset 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 Mirae Asset 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 Mirae Asset Daewoo, you can compare the effects of market volatilities on LG Energy and Mirae Asset 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 Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Mirae Asset.
Diversification Opportunities for LG Energy and Mirae Asset
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 373220 and Mirae is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Mirae Asset Daewoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset Daewoo 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 Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset Daewoo has no effect on the direction of LG Energy i.e., LG Energy and Mirae Asset go up and down completely randomly.
Pair Corralation between LG Energy and Mirae Asset
Assuming the 90 days trading horizon LG Energy is expected to generate 1.32 times less return on investment than Mirae Asset. In addition to that, LG Energy is 6.23 times more volatile than Mirae Asset Daewoo. It trades about 0.05 of its total potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.37 per unit of volatility. If you would invest 389,000 in Mirae Asset Daewoo on October 29, 2024 and sell it today you would earn a total of 11,000 from holding Mirae Asset Daewoo or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Mirae Asset Daewoo
Performance |
| Timeline |
| LG Energy Solution |
| Mirae Asset Daewoo |
LG Energy and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Mirae Asset
The main advantage of trading using opposite LG Energy and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Mirae Asset 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 Mirae Asset will offset losses from the drop in Mirae Asset's long position.| LG Energy vs. Cube Entertainment | LG Energy vs. Alton Sports CoLtd | LG Energy vs. Daejung Chemicals Metals | LG Energy vs. Formetal Co |
| Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. LG Energy Solution | Mirae Asset vs. SK Hynix |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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