Correlation Between LG Clean and IShares Global
Can any of the company-specific risk be diversified away by investing in both LG Clean and IShares Global 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 Global 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 Global Timber, you can compare the effects of market volatilities on LG Clean and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Clean and IShares Global.
Diversification Opportunities for LG Clean and IShares Global
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GLUG and IShares is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LG Clean Water and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of LG Clean i.e., LG Clean and IShares Global go up and down completely randomly.
Pair Corralation between LG Clean and IShares Global
Assuming the 90 days trading horizon LG Clean Water is expected to generate 0.83 times more return on investment than IShares Global. However, LG Clean Water is 1.2 times less risky than IShares Global. It trades about 0.03 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.0 per unit of risk. If you would invest 1,367 in LG Clean Water on October 13, 2024 and sell it today you would earn a total of 200.00 from holding LG Clean Water or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.87% |
| Values | Daily Returns |
LG Clean Water vs. iShares Global Timber
Performance |
| Timeline |
| LG Clean Water |
| iShares Global Timber |
LG Clean and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Clean and IShares Global
The main advantage of trading using opposite LG Clean and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Clean position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global'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 Global vs. UBSFund Solutions MSCI | IShares Global vs. Vanguard SP 500 | IShares Global vs. iShares Core SP | IShares Global vs. iShares Core MSCI |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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