Correlation Between Adaptive Plasma and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Adaptive Plasma and LG Chemicals 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 Adaptive Plasma and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaptive Plasma Technology and LG Chemicals, you can compare the effects of market volatilities on Adaptive Plasma and LG Chemicals 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 Adaptive Plasma with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptive Plasma and LG Chemicals.
Diversification Opportunities for Adaptive Plasma and LG Chemicals
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adaptive and 051910 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Adaptive Plasma Technology and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and Adaptive Plasma 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 Adaptive Plasma Technology are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Adaptive Plasma i.e., Adaptive Plasma and LG Chemicals go up and down completely randomly.
Pair Corralation between Adaptive Plasma and LG Chemicals
Assuming the 90 days trading horizon Adaptive Plasma Technology is expected to under-perform the LG Chemicals. In addition to that, Adaptive Plasma is 1.2 times more volatile than LG Chemicals. It trades about -0.24 of its total potential returns per unit of risk. LG Chemicals is currently generating about -0.11 per unit of volatility. If you would invest 34,000,000 in LG Chemicals on September 1, 2024 and sell it today you would lose (5,600,000) from holding LG Chemicals or give up 16.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Adaptive Plasma Technology vs. LG Chemicals
Performance |
Timeline |
Adaptive Plasma Tech |
LG Chemicals |
Adaptive Plasma and LG Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adaptive Plasma and LG Chemicals
The main advantage of trading using opposite Adaptive Plasma and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptive Plasma position performs unexpectedly, LG Chemicals 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 Chemicals will offset losses from the drop in LG Chemicals' long position.Adaptive Plasma vs. SK Hynix | Adaptive Plasma vs. LX Semicon Co | Adaptive Plasma vs. People Technology | Adaptive Plasma vs. SIMMTECH Co |
LG Chemicals vs. Korea Investment Holdings | LG Chemicals vs. INNOX Advanced Materials | LG Chemicals vs. Union Materials Corp | LG Chemicals vs. DB Financial Investment |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |