Correlation Between LG Energy and HB Technology
Can any of the company-specific risk be diversified away by investing in both LG Energy and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on LG Energy and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and HB Technology.
Diversification Opportunities for LG Energy and HB Technology
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 373220 and 078150 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of LG Energy i.e., LG Energy and HB Technology go up and down completely randomly.
Pair Corralation between LG Energy and HB Technology
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 0.89 times more return on investment than HB Technology. However, LG Energy Solution is 1.12 times less risky than HB Technology. It trades about -0.08 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.24 per unit of risk. If you would invest 41,600,000 in LG Energy Solution on September 12, 2024 and sell it today you would lose (3,100,000) from holding LG Energy Solution or give up 7.45% 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. HB Technology TD
Performance |
| Timeline |
| LG Energy Solution |
| HB Technology TD |
LG Energy and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and HB Technology
The main advantage of trading using opposite LG Energy and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology'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 |
| HB Technology vs. Cube Entertainment | HB Technology vs. Dreamus Company | HB Technology vs. LG Energy Solution | HB Technology 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |