Correlation Between LG Energy and Hanjinkal
Can any of the company-specific risk be diversified away by investing in both LG Energy and Hanjinkal 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 Hanjinkal 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 Hanjinkal, you can compare the effects of market volatilities on LG Energy and Hanjinkal 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 Hanjinkal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Hanjinkal.
Diversification Opportunities for LG Energy and Hanjinkal
Very weak diversification
The 3 months correlation between 373220 and Hanjinkal is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Hanjinkal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjinkal 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 Hanjinkal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjinkal has no effect on the direction of LG Energy i.e., LG Energy and Hanjinkal go up and down completely randomly.
Pair Corralation between LG Energy and Hanjinkal
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 1.58 times more return on investment than Hanjinkal. However, LG Energy is 1.58 times more volatile than Hanjinkal. It trades about -0.01 of its potential returns per unit of risk. Hanjinkal is currently generating about -0.19 per unit of risk. If you would invest 41,650,000 in LG Energy Solution on August 29, 2024 and sell it today you would lose (1,050,000) from holding LG Energy Solution or give up 2.52% 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. Hanjinkal
Performance |
| Timeline |
| LG Energy Solution |
| Hanjinkal |
LG Energy and Hanjinkal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Hanjinkal
The main advantage of trading using opposite LG Energy and Hanjinkal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Hanjinkal 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 Hanjinkal will offset losses from the drop in Hanjinkal's long position.| LG Energy vs. Lake Materials Co | LG Energy vs. LG Display Co | LG Energy vs. TOPMATERIAL LTD | LG Energy vs. Daesung Hi Tech Co |
| Hanjinkal vs. Korean Drug Co | Hanjinkal vs. Shinsegae Information Communication | Hanjinkal vs. CU Medical Systems | Hanjinkal vs. Inzi Display CoLtd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |