Correlation Between LG Energy and Iljin HySolus
Can any of the company-specific risk be diversified away by investing in both LG Energy and Iljin HySolus 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 Iljin HySolus 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 Iljin HySolus Co, you can compare the effects of market volatilities on LG Energy and Iljin HySolus 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 Iljin HySolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Energy and Iljin HySolus.
Diversification Opportunities for LG Energy and Iljin HySolus
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 373220 and Iljin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding LG Energy Solution and Iljin HySolus Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin HySolus 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 Iljin HySolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin HySolus has no effect on the direction of LG Energy i.e., LG Energy and Iljin HySolus go up and down completely randomly.
Pair Corralation between LG Energy and Iljin HySolus
Assuming the 90 days trading horizon LG Energy Solution is expected to generate 1.07 times more return on investment than Iljin HySolus. However, LG Energy is 1.07 times more volatile than Iljin HySolus Co. It trades about 0.0 of its potential returns per unit of risk. Iljin HySolus Co is currently generating about -0.04 per unit of risk. If you would invest 42,850,000 in LG Energy Solution on September 4, 2024 and sell it today you would lose (3,700,000) from holding LG Energy Solution or give up 8.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Energy Solution vs. Iljin HySolus Co
Performance |
| Timeline |
| LG Energy Solution |
| Iljin HySolus |
LG Energy and Iljin HySolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Energy and Iljin HySolus
The main advantage of trading using opposite LG Energy and Iljin HySolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Energy position performs unexpectedly, Iljin HySolus 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 Iljin HySolus will offset losses from the drop in Iljin HySolus' long position.| LG Energy vs. Kaonmedia Co | LG Energy vs. YG Entertainment | LG Energy vs. DC Media Co | LG Energy vs. Nable Communications |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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