Correlation Between LG Energy and PC Direct
Can any of the company-specific risk be diversified away by investing in both LG Energy and PC Direct 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 PC Direct 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 PC Direct, you can compare the effects of market volatilities on LG Energy and PC Direct 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 PC Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and PC Direct.
Diversification Opportunities for LG Energy and PC Direct
Pay attention - limited upside
The 3 months correlation between 373220 and 051380 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and PC Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Direct 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 PC Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Direct has no effect on the direction of LG Energy i.e., LG Energy and PC Direct go up and down completely randomly.
Pair Corralation between LG Energy and PC Direct
If you would invest 0.00 in PC Direct on September 5, 2024 and sell it today you would earn a total of 0.00 from holding PC Direct or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
LG Energy Solution vs. PC Direct
Performance |
| Timeline |
| LG Energy Solution |
| PC Direct |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
LG Energy and PC Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and PC Direct
The main advantage of trading using opposite LG Energy and PC Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, PC Direct 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 PC Direct will offset losses from the drop in PC Direct's long position.| LG Energy vs. LG Household Healthcare | LG Energy vs. Eagle Veterinary Technology | LG Energy vs. Asiana Airlines | LG Energy vs. LG Household Healthcare |
| PC Direct vs. Stic Investments | PC Direct vs. AurosTechnology | PC Direct vs. Hanwha InvestmentSecurities Co | PC Direct vs. LB Investment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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