Correlation Between LG Energy and INtRON Biotechnology
Can any of the company-specific risk be diversified away by investing in both LG Energy and INtRON Biotechnology 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 INtRON Biotechnology 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 iNtRON Biotechnology, you can compare the effects of market volatilities on LG Energy and INtRON Biotechnology 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 INtRON Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and INtRON Biotechnology.
Diversification Opportunities for LG Energy and INtRON Biotechnology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 373220 and INtRON is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and iNtRON Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iNtRON Biotechnology 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 INtRON Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iNtRON Biotechnology has no effect on the direction of LG Energy i.e., LG Energy and INtRON Biotechnology go up and down completely randomly.
Pair Corralation between LG Energy and INtRON Biotechnology
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 1.89 times more return on investment than INtRON Biotechnology. However, LG Energy is 1.89 times more volatile than iNtRON Biotechnology. It trades about -0.01 of its potential returns per unit of risk. iNtRON Biotechnology is currently generating about -0.07 per unit of risk. If you would invest 41,650,000 in LG Energy Solution on August 29, 2024 and sell it today you would lose (1,050,000) from holding LG Energy Solution or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. iNtRON Biotechnology
Performance |
| Timeline |
| LG Energy Solution |
| iNtRON Biotechnology |
LG Energy and INtRON Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and INtRON Biotechnology
The main advantage of trading using opposite LG Energy and INtRON Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, INtRON Biotechnology 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 INtRON Biotechnology will offset losses from the drop in INtRON Biotechnology's long position.| LG Energy vs. Lake Materials Co | LG Energy vs. LG Display Co | LG Energy vs. TOPMATERIAL LTD | LG Energy vs. Daesung Hi Tech Co |
| INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. LG Energy Solution | INtRON Biotechnology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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