Correlation Between Dow Jones and LG Innotek
Can any of the company-specific risk be diversified away by investing in both Dow Jones and LG Innotek 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 Dow Jones and LG Innotek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and LG Innotek Co, you can compare the effects of market volatilities on Dow Jones and LG Innotek 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 Dow Jones with a short position of LG Innotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and LG Innotek.
Diversification Opportunities for Dow Jones and LG Innotek
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and 011070 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and LG Innotek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Innotek and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with LG Innotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Innotek has no effect on the direction of Dow Jones i.e., Dow Jones and LG Innotek go up and down completely randomly.
Pair Corralation between Dow Jones and LG Innotek
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.26 times more return on investment than LG Innotek. However, Dow Jones Industrial is 3.82 times less risky than LG Innotek. It trades about 0.23 of its potential returns per unit of risk. LG Innotek Co is currently generating about -0.11 per unit of risk. If you would invest 3,870,327 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 607,873 from holding Dow Jones Industrial or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Dow Jones Industrial vs. LG Innotek Co
Performance |
| Timeline |
Dow Jones and LG Innotek Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
LG Innotek Co
Pair trading matchups for LG Innotek
Pair Trading with Dow Jones and LG Innotek
The main advantage of trading using opposite Dow Jones and LG Innotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, LG Innotek 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 LG Innotek will offset losses from the drop in LG Innotek's long position.| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
| LG Innotek vs. Daejung Chemicals Metals | LG Innotek vs. DONGKUK TED METAL | LG Innotek vs. GS Retail Co | LG Innotek vs. Youngsin Metal Industrial |
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.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |