Correlation Between LG ROBO and Vanguard USD
Can any of the company-specific risk be diversified away by investing in both LG ROBO and Vanguard USD 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 ROBO and Vanguard USD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG ROBO Global and Vanguard USD Treasury, you can compare the effects of market volatilities on LG ROBO and Vanguard USD 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 ROBO with a short position of Vanguard USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG ROBO and Vanguard USD.
Diversification Opportunities for LG ROBO and Vanguard USD
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ROBO and Vanguard is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LG ROBO Global and Vanguard USD Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard USD Treasury and LG ROBO 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 ROBO Global are associated (or correlated) with Vanguard USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard USD Treasury has no effect on the direction of LG ROBO i.e., LG ROBO and Vanguard USD go up and down completely randomly.
Pair Corralation between LG ROBO and Vanguard USD
Assuming the 90 days trading horizon LG ROBO Global is expected to generate 2.81 times more return on investment than Vanguard USD. However, LG ROBO is 2.81 times more volatile than Vanguard USD Treasury. It trades about 0.18 of its potential returns per unit of risk. Vanguard USD Treasury is currently generating about 0.02 per unit of risk. If you would invest 2,071 in LG ROBO Global on November 2, 2024 and sell it today you would earn a total of 96.00 from holding LG ROBO Global or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
LG ROBO Global vs. Vanguard USD Treasury
Performance |
| Timeline |
| LG ROBO Global |
| Vanguard USD Treasury |
LG ROBO and Vanguard USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG ROBO and Vanguard USD
The main advantage of trading using opposite LG ROBO and Vanguard USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG ROBO position performs unexpectedly, Vanguard USD 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 Vanguard USD will offset losses from the drop in Vanguard USD's long position.| LG ROBO vs. Vanguard FTSE Emerging | LG ROBO vs. UBS ETF MSCI | LG ROBO vs. VanEck Solana ETN | LG ROBO vs. iShares Corp Bond |
| Vanguard USD vs. Vanguard FTSE Emerging | Vanguard USD vs. Vanguard USD Emerging | Vanguard USD vs. Vanguard FTSE Developed | Vanguard USD vs. Vanguard FTSE Japan |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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