Correlation Between HANetf ICAV and LG Battery
Can any of the company-specific risk be diversified away by investing in both HANetf ICAV and LG Battery 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 HANetf ICAV and LG Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANetf ICAV and LG Battery Value Chain, you can compare the effects of market volatilities on HANetf ICAV and LG Battery 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 HANetf ICAV with a short position of LG Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANetf ICAV and LG Battery.
Diversification Opportunities for HANetf ICAV and LG Battery
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HANetf and BATE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding HANetf ICAV and LG Battery Value Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Battery Value and HANetf ICAV 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 HANetf ICAV are associated (or correlated) with LG Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Battery Value has no effect on the direction of HANetf ICAV i.e., HANetf ICAV and LG Battery go up and down completely randomly.
Pair Corralation between HANetf ICAV and LG Battery
Assuming the 90 days trading horizon HANetf ICAV is expected to generate 0.79 times more return on investment than LG Battery. However, HANetf ICAV is 1.27 times less risky than LG Battery. It trades about 0.07 of its potential returns per unit of risk. LG Battery Value Chain is currently generating about 0.05 per unit of risk. If you would invest 860.00 in HANetf ICAV on October 26, 2024 and sell it today you would earn a total of 97.00 from holding HANetf ICAV or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANetf ICAV vs. LG Battery Value Chain
Performance |
| Timeline |
| HANetf ICAV |
| LG Battery Value |
HANetf ICAV and LG Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANetf ICAV and LG Battery
The main advantage of trading using opposite HANetf ICAV and LG Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANetf ICAV position performs unexpectedly, LG Battery 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 Battery will offset losses from the drop in LG Battery's long position.| HANetf ICAV vs. HANetf ICAV | HANetf ICAV vs. HANetf II ICAV | HANetf ICAV vs. HANetf INQQIndiaInternetEcommESGSETFAcc | HANetf ICAV vs. HANetf ICAV |
| LG Battery vs. UBS Fund Solutions | LG Battery vs. Xtrackers II | LG Battery vs. Xtrackers Nikkei 225 | LG Battery vs. iShares VII PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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