Correlation Between LG Energy and I-Components
Can any of the company-specific risk be diversified away by investing in both LG Energy and I-Components 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 I-Components 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 i Components Co, you can compare the effects of market volatilities on LG Energy and I-Components 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 I-Components. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and I-Components.
Diversification Opportunities for LG Energy and I-Components
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between 373220 and I-Components is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and i Components Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i Components 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 I-Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i Components has no effect on the direction of LG Energy i.e., LG Energy and I-Components go up and down completely randomly.
Pair Corralation between LG Energy and I-Components
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 0.93 times more return on investment than I-Components. However, LG Energy Solution is 1.08 times less risky than I-Components. It trades about 0.0 of its potential returns per unit of risk. i Components Co is currently generating about -0.01 per unit of risk. If you would invest 44,300,000 in LG Energy Solution on September 25, 2024 and sell it today you would lose (8,400,000) from holding LG Energy Solution or give up 18.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. i Components Co
Performance |
| Timeline |
| LG Energy Solution |
| i Components |
LG Energy and I-Components Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and I-Components
The main advantage of trading using opposite LG Energy and I-Components positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, I-Components 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 I-Components will offset losses from the drop in I-Components' long position.| LG Energy vs. System and Application | LG Energy vs. LB Investment | LG Energy vs. NICE Information Service | LG Energy vs. Korea Information Engineering |
| I-Components vs. Samsung Electronics Co | I-Components vs. Samsung Electronics Co | I-Components vs. LG Energy Solution | I-Components 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |