Correlation Between LG Cyber and LG Russell
Can any of the company-specific risk be diversified away by investing in both LG Cyber and LG Russell 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 Cyber and LG Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Cyber Security and LG Russell 2000, you can compare the effects of market volatilities on LG Cyber and LG Russell 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 Cyber with a short position of LG Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Cyber and LG Russell.
Diversification Opportunities for LG Cyber and LG Russell
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ISPY and RTWO is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding LG Cyber Security and LG Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Russell 2000 and LG Cyber 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 Cyber Security are associated (or correlated) with LG Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Russell 2000 has no effect on the direction of LG Cyber i.e., LG Cyber and LG Russell go up and down completely randomly.
Pair Corralation between LG Cyber and LG Russell
Assuming the 90 days trading horizon LG Cyber Security is expected to generate 1.06 times more return on investment than LG Russell. However, LG Cyber is 1.06 times more volatile than LG Russell 2000. It trades about 0.07 of its potential returns per unit of risk. LG Russell 2000 is currently generating about 0.08 per unit of risk. If you would invest 2,008 in LG Cyber Security on August 29, 2024 and sell it today you would earn a total of 625.00 from holding LG Cyber Security or generate 31.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Cyber Security vs. LG Russell 2000
Performance |
| Timeline |
| LG Cyber Security |
| LG Russell 2000 |
LG Cyber and LG Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Cyber and LG Russell
The main advantage of trading using opposite LG Cyber and LG Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Cyber position performs unexpectedly, LG Russell 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 Russell will offset losses from the drop in LG Russell's long position.| LG Cyber vs. LG Russell 2000 | LG Cyber vs. VanEck Multi Asset Growth | LG Cyber vs. iShares III Public | LG Cyber 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |