Correlation Between LG Electronics and CRRC
Can any of the company-specific risk be diversified away by investing in both LG Electronics and CRRC 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 Electronics and CRRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and CRRC Limited, you can compare the effects of market volatilities on LG Electronics and CRRC 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 Electronics with a short position of CRRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and CRRC.
Diversification Opportunities for LG Electronics and CRRC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGLG and CRRC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and CRRC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRRC Limited and LG Electronics 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 Electronics are associated (or correlated) with CRRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRRC Limited has no effect on the direction of LG Electronics i.e., LG Electronics and CRRC go up and down completely randomly.
Pair Corralation between LG Electronics and CRRC
If you would invest 61.00 in CRRC Limited on January 19, 2025 and sell it today you would earn a total of 0.00 from holding CRRC Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Electronics vs. CRRC Limited
Performance |
| Timeline |
| LG Electronics |
| CRRC Limited |
LG Electronics and CRRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and CRRC
The main advantage of trading using opposite LG Electronics and CRRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, CRRC 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 CRRC will offset losses from the drop in CRRC's long position.| LG Electronics vs. Choice Hotels International | LG Electronics vs. KENEDIX OFFICE INV | LG Electronics vs. CSSC Offshore Marine | LG Electronics vs. PPHE HOTEL GROUP |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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