Correlation Between TRADEDOUBLER and LG Electronics
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER and LG Electronics 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 TRADEDOUBLER and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and LG Electronics, you can compare the effects of market volatilities on TRADEDOUBLER and LG Electronics 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 TRADEDOUBLER with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and LG Electronics.
Diversification Opportunities for TRADEDOUBLER and LG Electronics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRADEDOUBLER and LGLG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and LG Electronics go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and LG Electronics
Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 2.56 times more return on investment than LG Electronics. However, TRADEDOUBLER is 2.56 times more volatile than LG Electronics. It trades about -0.02 of its potential returns per unit of risk. LG Electronics is currently generating about -0.06 per unit of risk. If you would invest 27.00 in TRADEDOUBLER AB SK on August 25, 2024 and sell it today you would lose (1.00) from holding TRADEDOUBLER AB SK or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. LG Electronics
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| LG Electronics |
TRADEDOUBLER and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and LG Electronics
The main advantage of trading using opposite TRADEDOUBLER and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER position performs unexpectedly, LG Electronics 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 Electronics will offset losses from the drop in LG Electronics' long position.| TRADEDOUBLER vs. The Interpublic Group | TRADEDOUBLER vs. Superior Plus Corp | TRADEDOUBLER vs. NMI Holdings | TRADEDOUBLER vs. Origin Agritech |
| LG Electronics vs. AUTO TRADER ADR | LG Electronics vs. TRADEDOUBLER AB SK | LG Electronics vs. Auto Trader Group | LG Electronics vs. MHP Hotel AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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