Correlation Between LG Energy and Koh Young
Can any of the company-specific risk be diversified away by investing in both LG Energy and Koh Young 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 Koh Young 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 Koh Young Technology, you can compare the effects of market volatilities on LG Energy and Koh Young 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 Koh Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Koh Young.
Diversification Opportunities for LG Energy and Koh Young
Weak diversification
The 3 months correlation between 373220 and Koh is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Koh Young Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koh Young Technology 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 Koh Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koh Young Technology has no effect on the direction of LG Energy i.e., LG Energy and Koh Young go up and down completely randomly.
Pair Corralation between LG Energy and Koh Young
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the Koh Young. But the stock apears to be less risky and, when comparing its historical volatility, LG Energy Solution is 1.47 times less risky than Koh Young. The stock trades about -0.14 of its potential returns per unit of risk. The Koh Young Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 857,000 in Koh Young Technology on October 20, 2024 and sell it today you would earn a total of 83,000 from holding Koh Young Technology or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Koh Young Technology
Performance |
| Timeline |
| LG Energy Solution |
| Koh Young Technology |
LG Energy and Koh Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Koh Young
The main advantage of trading using opposite LG Energy and Koh Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Koh Young 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 Koh Young will offset losses from the drop in Koh Young's long position.| LG Energy vs. SEOWONINTECHCoLtd | LG Energy vs. KMH Hitech Co | LG Energy vs. Spolytech Co | LG Energy vs. Mobile Appliance |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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