Correlation Between LG Energy and V One
Can any of the company-specific risk be diversified away by investing in both LG Energy and V One 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 V One 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 V One Tech Co, you can compare the effects of market volatilities on LG Energy and V One 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 V One. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and V One.
Diversification Opportunities for LG Energy and V One
Very good diversification
The 3 months correlation between 373220 and 251630 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and V One Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V One Tech 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 V One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V One Tech has no effect on the direction of LG Energy i.e., LG Energy and V One go up and down completely randomly.
Pair Corralation between LG Energy and V One
Assuming the 90 days trading horizon LG Energy Solution is expected to under-perform the V One. But the stock apears to be less risky and, when comparing its historical volatility, LG Energy Solution is 1.7 times less risky than V One. The stock trades about -0.05 of its potential returns per unit of risk. The V One Tech Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 370,168 in V One Tech Co on October 21, 2024 and sell it today you would earn a total of 92,832 from holding V One Tech Co or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. V One Tech Co
Performance |
| Timeline |
| LG Energy Solution |
| V One Tech |
LG Energy and V One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and V One
The main advantage of trading using opposite LG Energy and V One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, V One 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 V One will offset losses from the drop in V One's long position.| LG Energy vs. SEOWONINTECHCoLtd | LG Energy vs. KMH Hitech Co | LG Energy vs. Spolytech Co | LG Energy vs. Mobile Appliance |
| V One vs. Samsung Electronics Co | V One vs. Samsung Electronics Co | V One vs. LG Energy Solution | V One vs. SK Hynix |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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