Correlation Between LG Clean and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both LG Clean and Xtrackers 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 Clean and Xtrackers MSCI 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 Xtrackers MSCI China, you can compare the effects of market volatilities on LG Clean and Xtrackers 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 Clean with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Clean and Xtrackers MSCI.
Diversification Opportunities for LG Clean and Xtrackers MSCI
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GLUG and Xtrackers is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding LG Clean Water and Xtrackers MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI China 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI China has no effect on the direction of LG Clean i.e., LG Clean and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between LG Clean and Xtrackers MSCI
Assuming the 90 days trading horizon LG Clean Water is expected to generate 0.41 times more return on investment than Xtrackers MSCI. However, LG Clean Water is 2.44 times less risky than Xtrackers MSCI. It trades about 0.25 of its potential returns per unit of risk. Xtrackers MSCI China is currently generating about -0.08 per unit of risk. If you would invest 1,585 in LG Clean Water on October 29, 2024 and sell it today you would earn a total of 45.00 from holding LG Clean Water or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.35% |
| Values | Daily Returns |
LG Clean Water vs. Xtrackers MSCI China
Performance |
| Timeline |
| LG Clean Water |
| Xtrackers MSCI China |
LG Clean and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Clean and Xtrackers MSCI
The main advantage of trading using opposite LG Clean and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Clean position performs unexpectedly, Xtrackers 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI'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 |
| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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