Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Korea's New SSF/SSO Listing on July 25 & LG Energy's Massive Lockup Release on July 27

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LG Chem & LG Energy LONG/SHORT Pair Trading on a Massive NAV Discount

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Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The price diversion between LG Chem and LG Energy has deepened considerably over the past two days. The sigma is currently -2.35. It is virtually the most extreme level year-to-date.</li>
<li>LG Energy's immediate-term overhang risk will likely offset the upcoming passive inflow event. In addition, the intensity of their price cointegration has not been weakened in recent months.</li>
<li>Therefore, we should consider setting up reversion trading from this point on, aimed at the lockup release on July 27.</li>
</ul>


The price diversion between LG Chem and LG Energy has deepened considerably over the past two days. The sigma is currently -2.35. It is virtually the most extreme level year-to-date.
LG Energy's immediate-term overhang risk will likely offset the upcoming passive inflow event. In addition, the intensity of their price cointegration has not been weakened in recent months.
Therefore, we should consider setting up reversion trading from this point on, aimed at the lockup release on July 27.


Reversion Trading on a Massive Price Diversion of LG Chem & LG Energy Solution