Correlation Between Sam Yang and LG Display
Can any of the company-specific risk be diversified away by investing in both Sam Yang and LG Display 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 Sam Yang and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam Yang Foods and LG Display, you can compare the effects of market volatilities on Sam Yang and LG Display 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 Sam Yang with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and LG Display.
Diversification Opportunities for Sam Yang and LG Display
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sam and 034220 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Sam Yang 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 Sam Yang Foods are associated (or correlated) with LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Sam Yang i.e., Sam Yang and LG Display go up and down completely randomly.
Pair Corralation between Sam Yang and LG Display
Assuming the 90 days trading horizon Sam Yang Foods is expected to under-perform the LG Display. In addition to that, Sam Yang is 1.31 times more volatile than LG Display. It trades about -0.01 of its total potential returns per unit of risk. LG Display is currently generating about -0.01 per unit of volatility. If you would invest 1,012,000 in LG Display on September 3, 2024 and sell it today you would lose (64,000) from holding LG Display or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. LG Display
Performance |
| Timeline |
| Sam Yang Foods |
| LG Display |
Sam Yang and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and LG Display
The main advantage of trading using opposite Sam Yang and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, LG Display 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 Display will offset losses from the drop in LG Display's long position.| Sam Yang vs. LG Display | Sam Yang vs. Hyundai Motor | Sam Yang vs. Hyundai Motor Co | Sam Yang vs. Hyundai Motor Co |
| LG Display vs. Cuckoo Homesys Co | LG Display vs. Duksan Hi Metal | LG Display vs. Youngsin Metal Industrial | LG Display vs. PJ Metal Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |