Correlation Between LG Energy and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both LG Energy and Camus Engineering 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 Camus Engineering 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 Camus Engineering Construction, you can compare the effects of market volatilities on LG Energy and Camus Engineering 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 Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Camus Engineering.
Diversification Opportunities for LG Energy and Camus Engineering
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 373220 and Camus is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering 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 Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of LG Energy i.e., LG Energy and Camus Engineering go up and down completely randomly.
Pair Corralation between LG Energy and Camus Engineering
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the Camus Engineering. In addition to that, LG Energy is 2.17 times more volatile than Camus Engineering Construction. It trades about -0.05 of its total potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.05 per unit of volatility. If you would invest 130,800 in Camus Engineering Construction on September 1, 2024 and sell it today you would lose (3,000) from holding Camus Engineering Construction or give up 2.29% 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. Camus Engineering Construction
Performance |
| Timeline |
| LG Energy Solution |
| Camus Engineering |
LG Energy and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Camus Engineering
The main advantage of trading using opposite LG Energy and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering'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 |
| Camus Engineering vs. Samsung CT Corp | Camus Engineering vs. Hyundai Engineering Construction | Camus Engineering vs. Kolon Globalco |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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