Correlation Between LG Energy and Sajo Ind
Can any of the company-specific risk be diversified away by investing in both LG Energy and Sajo Ind 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 Sajo Ind 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 Sajo Ind, you can compare the effects of market volatilities on LG Energy and Sajo Ind 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 Sajo Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Sajo Ind.
Diversification Opportunities for LG Energy and Sajo Ind
Weak diversification
The 3 months correlation between 373220 and Sajo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Sajo Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Ind 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 Sajo Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Ind has no effect on the direction of LG Energy i.e., LG Energy and Sajo Ind go up and down completely randomly.
Pair Corralation between LG Energy and Sajo Ind
Assuming the 90 days trading horizon LG Energy is expected to generate 1.29 times less return on investment than Sajo Ind. But when comparing it to its historical volatility, LG Energy Solution is 1.67 times less risky than Sajo Ind. It trades about 0.0 of its potential returns per unit of risk. Sajo Ind is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,280,000 in Sajo Ind on September 14, 2024 and sell it today you would lose (700,000) from holding Sajo Ind or give up 16.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Sajo Ind
Performance |
| Timeline |
| LG Energy Solution |
| Sajo Ind |
LG Energy and Sajo Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Sajo Ind
The main advantage of trading using opposite LG Energy and Sajo Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Sajo Ind 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 Sajo Ind will offset losses from the drop in Sajo Ind's long position.| LG Energy vs. Samyang Foods Co | LG Energy vs. FoodNamoo | LG Energy vs. PNC Technologies co | LG Energy vs. Lion Chemtech Co |
| Sajo Ind vs. Samsung Electronics Co | Sajo Ind vs. Samsung Electronics Co | Sajo Ind vs. LG Energy Solution | Sajo Ind 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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