Correlation Between LG Energy and Green Cross
Can any of the company-specific risk be diversified away by investing in both LG Energy and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on LG Energy and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Green Cross.
Diversification Opportunities for LG Energy and Green Cross
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 373220 and Green is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of LG Energy i.e., LG Energy and Green Cross go up and down completely randomly.
Pair Corralation between LG Energy and Green Cross
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the Green Cross. But the stock apears to be less risky and, when comparing its historical volatility, LG Energy Solution is 1.24 times less risky than Green Cross. The stock trades about -0.02 of its potential returns per unit of risk. The Green Cross Medical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 510,000 in Green Cross Medical on November 27, 2024 and sell it today you would lose (118,500) from holding Green Cross Medical or give up 23.24% 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. Green Cross Medical
Performance |
| Timeline |
| LG Energy Solution |
| Green Cross Medical |
LG Energy and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Green Cross
The main advantage of trading using opposite LG Energy and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| LG Energy vs. Worldex Industry Trading | LG Energy vs. Aju IB Investment | LG Energy vs. Hana Financial | LG Energy vs. Jeju Bank |
| Green Cross vs. Iljin Materials Co | Green Cross vs. Hyosung Advanced Materials | Green Cross vs. National Plastic Co | Green Cross vs. LAKE MATERIALS LTD |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |