Correlation Between LG Clean and IShares Asia
Can any of the company-specific risk be diversified away by investing in both LG Clean and IShares Asia 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 Clean and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Clean Water and iShares Asia Pacific, you can compare the effects of market volatilities on LG Clean and IShares Asia 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 Clean with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Clean and IShares Asia.
Diversification Opportunities for LG Clean and IShares Asia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GLUG and IShares is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding LG Clean Water and iShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Pacific and LG Clean 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 Clean Water are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Pacific has no effect on the direction of LG Clean i.e., LG Clean and IShares Asia go up and down completely randomly.
Pair Corralation between LG Clean and IShares Asia
Assuming the 90 days trading horizon LG Clean Water is expected to generate 1.09 times more return on investment than IShares Asia. However, LG Clean is 1.09 times more volatile than iShares Asia Pacific. It trades about -0.04 of its potential returns per unit of risk. iShares Asia Pacific is currently generating about -0.09 per unit of risk. If you would invest 1,655 in LG Clean Water on November 7, 2024 and sell it today you would lose (39.00) from holding LG Clean Water or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Clean Water vs. iShares Asia Pacific
Performance |
| Timeline |
| LG Clean Water |
| iShares Asia Pacific |
LG Clean and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Clean and IShares Asia
The main advantage of trading using opposite LG Clean and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Clean position performs unexpectedly, IShares Asia 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 IShares Asia will offset losses from the drop in IShares Asia's long position.| LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. VanEck Solana ETN | LG Clean vs. iShares Corp Bond |
| IShares Asia vs. UBSFund Solutions MSCI | IShares Asia vs. Vanguard SP 500 | IShares Asia vs. iShares VII PLC | IShares Asia vs. iShares Core SP |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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