Correlation Between Vanguard FTSE and LG Battery
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and LG Battery 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 Vanguard FTSE and LG Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Emerging and LG Battery Value Chain, you can compare the effects of market volatilities on Vanguard FTSE and LG Battery 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 Vanguard FTSE with a short position of LG Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and LG Battery.
Diversification Opportunities for Vanguard FTSE and LG Battery
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and BATT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Emerging and LG Battery Value Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Battery Value and Vanguard FTSE 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 Vanguard FTSE Emerging are associated (or correlated) with LG Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Battery Value has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and LG Battery go up and down completely randomly.
Pair Corralation between Vanguard FTSE and LG Battery
Assuming the 90 days trading horizon Vanguard FTSE is expected to generate 1.86 times less return on investment than LG Battery. But when comparing it to its historical volatility, Vanguard FTSE Emerging is 1.72 times less risky than LG Battery. It trades about 0.13 of its potential returns per unit of risk. LG Battery Value Chain is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,551 in LG Battery Value Chain on October 25, 2024 and sell it today you would earn a total of 48.00 from holding LG Battery Value Chain or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Emerging vs. LG Battery Value Chain
Performance |
| Timeline |
| Vanguard FTSE Emerging |
| LG Battery Value |
Vanguard FTSE and LG Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and LG Battery
The main advantage of trading using opposite Vanguard FTSE and LG Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, LG Battery 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 Battery will offset losses from the drop in LG Battery's long position.| Vanguard FTSE vs. Vanguard USD Emerging | Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard FTSE Japan | Vanguard FTSE vs. Vanguard EUR Eurozone |
| LG Battery vs. Vanguard FTSE Emerging | LG Battery vs. UBS ETF MSCI | LG Battery vs. VanEck Solana ETN | LG Battery vs. iShares Corp Bond |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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