Correlation Between LG Energy and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both LG Energy and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on LG Energy and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and UJU Electronics.
Diversification Opportunities for LG Energy and UJU Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 373220 and UJU is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of LG Energy i.e., LG Energy and UJU Electronics go up and down completely randomly.
Pair Corralation between LG Energy and UJU Electronics
Assuming the 90 days trading horizon LG Energy is expected to generate 2.88 times less return on investment than UJU Electronics. But when comparing it to its historical volatility, LG Energy Solution is 1.02 times less risky than UJU Electronics. It trades about 0.0 of its potential returns per unit of risk. UJU Electronics Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,397,119 in UJU Electronics Co on September 14, 2024 and sell it today you would lose (52,119) from holding UJU Electronics Co or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. UJU Electronics Co
Performance |
| Timeline |
| LG Energy Solution |
| UJU Electronics |
LG Energy and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and UJU Electronics
The main advantage of trading using opposite LG Energy and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| LG Energy vs. Samyang Foods Co | LG Energy vs. FoodNamoo | LG Energy vs. PNC Technologies co | LG Energy vs. Lion Chemtech Co |
| UJU Electronics vs. Cube Entertainment | UJU Electronics vs. Dreamus Company | UJU Electronics vs. LG Energy Solution | UJU Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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