Correlation Between LG Chemicals and Taekwang Ind
Can any of the company-specific risk be diversified away by investing in both LG Chemicals and Taekwang Ind 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 Chemicals and Taekwang Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chemicals and Taekwang Ind, you can compare the effects of market volatilities on LG Chemicals and Taekwang Ind 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 Chemicals with a short position of Taekwang Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chemicals and Taekwang Ind.
Diversification Opportunities for LG Chemicals and Taekwang Ind
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 051910 and Taekwang is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding LG Chemicals and Taekwang Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taekwang Ind and LG Chemicals 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 Chemicals are associated (or correlated) with Taekwang Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taekwang Ind has no effect on the direction of LG Chemicals i.e., LG Chemicals and Taekwang Ind go up and down completely randomly.
Pair Corralation between LG Chemicals and Taekwang Ind
Assuming the 90 days trading horizon LG Chemicals is expected to generate 1.93 times more return on investment than Taekwang Ind. However, LG Chemicals is 1.93 times more volatile than Taekwang Ind. It trades about 0.17 of its potential returns per unit of risk. Taekwang Ind is currently generating about -0.05 per unit of risk. If you would invest 27,550,000 in LG Chemicals on September 6, 2025 and sell it today you would earn a total of 10,050,000 from holding LG Chemicals or generate 36.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
LG Chemicals vs. Taekwang Ind
Performance |
| Timeline |
| LG Chemicals |
| Taekwang Ind |
LG Chemicals and Taekwang Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chemicals and Taekwang Ind
The main advantage of trading using opposite LG Chemicals and Taekwang Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chemicals position performs unexpectedly, Taekwang Ind 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 Taekwang Ind will offset losses from the drop in Taekwang Ind's long position.| LG Chemicals vs. Next Entertainment World | LG Chemicals vs. i Scream Media LTD | LG Chemicals vs. DC Media Co | LG Chemicals vs. EV Advanced Material |
| Taekwang Ind vs. LG Chemicals | Taekwang Ind vs. POSCO Holdings | Taekwang Ind vs. Hanwha Solutions | Taekwang Ind vs. Lotte Chemical Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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