Correlation Between CHEMICAL INDUSTRIES and LG Electronics
Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and LG Electronics, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and LG Electronics.
Diversification Opportunities for CHEMICAL INDUSTRIES and LG Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEMICAL and LGLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and LG Electronics go up and down completely randomly.
Pair Corralation between CHEMICAL INDUSTRIES and LG Electronics
If you would invest 1,440 in LG Electronics on August 31, 2024 and sell it today you would earn a total of 10.00 from holding LG Electronics or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHEMICAL INDUSTRIES vs. LG Electronics
Performance |
| Timeline |
| CHEMICAL INDUSTRIES |
| LG Electronics |
CHEMICAL INDUSTRIES and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMICAL INDUSTRIES and LG Electronics
The main advantage of trading using opposite CHEMICAL INDUSTRIES and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES 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.| CHEMICAL INDUSTRIES vs. SIVERS SEMICONDUCTORS AB | CHEMICAL INDUSTRIES vs. Darden Restaurants | CHEMICAL INDUSTRIES vs. Reliance Steel Aluminum | CHEMICAL INDUSTRIES vs. Q2M Managementberatung AG |
| LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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