Correlation Between LG Battery and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both LG Battery and Lyxor MSCI 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 Battery and Lyxor MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Battery Value Chain and Lyxor MSCI China, you can compare the effects of market volatilities on LG Battery and Lyxor MSCI 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 Battery with a short position of Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Battery and Lyxor MSCI.
Diversification Opportunities for LG Battery and Lyxor MSCI
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BATT and Lyxor is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding LG Battery Value Chain and Lyxor MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI China and LG Battery 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 Battery Value Chain are associated (or correlated) with Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI China has no effect on the direction of LG Battery i.e., LG Battery and Lyxor MSCI go up and down completely randomly.
Pair Corralation between LG Battery and Lyxor MSCI
Assuming the 90 days trading horizon LG Battery Value Chain is expected to under-perform the Lyxor MSCI. But the etf apears to be less risky and, when comparing its historical volatility, LG Battery Value Chain is 1.22 times less risky than Lyxor MSCI. The etf trades about -0.01 of its potential returns per unit of risk. The Lyxor MSCI China is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 9,641 in Lyxor MSCI China on September 3, 2024 and sell it today you would lose (575.00) from holding Lyxor MSCI China or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Battery Value Chain vs. Lyxor MSCI China
Performance |
| Timeline |
| LG Battery Value |
| Lyxor MSCI China |
LG Battery and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Battery and Lyxor MSCI
The main advantage of trading using opposite LG Battery and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Battery position performs unexpectedly, Lyxor MSCI 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 Lyxor MSCI will offset losses from the drop in Lyxor MSCI's long position.| LG Battery vs. Vanguard FTSE Emerging | LG Battery vs. UBS ETF MSCI | LG Battery vs. VanEck Solana ETN | LG Battery vs. iShares Corp Bond |
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 Correlations module to find global opportunities by holding instruments from different markets.
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