Correlation Between LG Energy and Han Kook
Can any of the company-specific risk be diversified away by investing in both LG Energy and Han Kook 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 Han Kook 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 Han Kook Capital, you can compare the effects of market volatilities on LG Energy and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Han Kook.
Diversification Opportunities for LG Energy and Han Kook
Modest diversification
The 3 months correlation between 373220 and Han is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Han Kook Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Capital 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Capital has no effect on the direction of LG Energy i.e., LG Energy and Han Kook go up and down completely randomly.
Pair Corralation between LG Energy and Han Kook
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the Han Kook. In addition to that, LG Energy is 1.61 times more volatile than Han Kook Capital. It trades about 0.0 of its total potential returns per unit of risk. Han Kook Capital is currently generating about 0.01 per unit of volatility. If you would invest 54,808 in Han Kook Capital on September 14, 2024 and sell it today you would earn a total of 592.00 from holding Han Kook Capital or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
LG Energy Solution vs. Han Kook Capital
Performance |
| Timeline |
| LG Energy Solution |
| Han Kook Capital |
LG Energy and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Han Kook
The main advantage of trading using opposite LG Energy and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook'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 |
| Han Kook vs. CG Hi Tech | Han Kook vs. Samlip General Foods | Han Kook vs. Sam Yang Foods | Han Kook vs. Korea Shipbuilding Offshore |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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