Correlation Between LG Energy and Haesung DS
Can any of the company-specific risk be diversified away by investing in both LG Energy and Haesung DS 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 Haesung DS 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 Haesung DS Co, you can compare the effects of market volatilities on LG Energy and Haesung DS 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 Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Haesung DS.
Diversification Opportunities for LG Energy and Haesung DS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 373220 and Haesung is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS 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 Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of LG Energy i.e., LG Energy and Haesung DS go up and down completely randomly.
Pair Corralation between LG Energy and Haesung DS
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 0.89 times more return on investment than Haesung DS. However, LG Energy Solution is 1.12 times less risky than Haesung DS. It trades about 0.0 of its potential returns per unit of risk. Haesung DS Co is currently generating about -0.01 per unit of risk. If you would invest 44,600,000 in LG Energy Solution on September 20, 2024 and sell it today you would lose (6,450,000) from holding LG Energy Solution or give up 14.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
LG Energy Solution vs. Haesung DS Co
Performance |
| Timeline |
| LG Energy Solution |
| Haesung DS |
LG Energy and Haesung DS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Haesung DS
The main advantage of trading using opposite LG Energy and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.| LG Energy vs. Samhwa Paint Industrial | LG Energy vs. Incar Financial Service | LG Energy vs. Koryo Credit Information | LG Energy vs. PJ Metal Co |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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