Correlation Between LG Energy and Inzi Display
Can any of the company-specific risk be diversified away by investing in both LG Energy and Inzi Display 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 Inzi Display 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 Inzi Display CoLtd, you can compare the effects of market volatilities on LG Energy and Inzi Display 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 Inzi Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Inzi Display.
Diversification Opportunities for LG Energy and Inzi Display
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 373220 and Inzi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Inzi Display CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inzi Display CoLtd 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 Inzi Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inzi Display CoLtd has no effect on the direction of LG Energy i.e., LG Energy and Inzi Display go up and down completely randomly.
Pair Corralation between LG Energy and Inzi Display
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 1.22 times more return on investment than Inzi Display. However, LG Energy is 1.22 times more volatile than Inzi Display CoLtd. It trades about -0.02 of its potential returns per unit of risk. Inzi Display CoLtd is currently generating about -0.06 per unit of risk. If you would invest 52,600,000 in LG Energy Solution on September 12, 2024 and sell it today you would lose (14,100,000) from holding LG Energy Solution or give up 26.81% 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. Inzi Display CoLtd
Performance |
| Timeline |
| LG Energy Solution |
| Inzi Display CoLtd |
LG Energy and Inzi Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Inzi Display
The main advantage of trading using opposite LG Energy and Inzi Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Inzi Display 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 Inzi Display will offset losses from the drop in Inzi Display's long position.| LG Energy vs. Bohae Brewery | LG Energy vs. Hanjin Transportation Co | LG Energy vs. Daehan Steel | LG Energy vs. Lotte Chilsung Beverage |
| Inzi Display vs. Cube Entertainment | Inzi Display vs. Dreamus Company | Inzi Display vs. LG Energy Solution | Inzi Display vs. Dongwon System |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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