Correlation Between LG Energy and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both LG Energy and Atinum 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 Atinum 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 Atinum Investment Co, you can compare the effects of market volatilities on LG Energy and Atinum 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Atinum Investment.
Diversification Opportunities for LG Energy and Atinum Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 373220 and Atinum is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of LG Energy i.e., LG Energy and Atinum Investment go up and down completely randomly.
Pair Corralation between LG Energy and Atinum Investment
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the Atinum Investment. But the stock apears to be less risky and, when comparing its historical volatility, LG Energy Solution is 1.0 times less risky than Atinum Investment. The stock trades about -0.02 of its potential returns per unit of risk. The Atinum Investment Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 289,780 in Atinum Investment Co on September 1, 2024 and sell it today you would lose (54,280) from holding Atinum Investment Co or give up 18.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Atinum Investment Co
Performance |
| Timeline |
| LG Energy Solution |
| Atinum Investment |
LG Energy and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Atinum Investment
The main advantage of trading using opposite LG Energy and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Atinum 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 Atinum Investment will offset losses from the drop in Atinum 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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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