Correlation Between Daehan Synthetic and LG Display
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic 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 Daehan Synthetic and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and LG Display Co, you can compare the effects of market volatilities on Daehan Synthetic 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 Daehan Synthetic with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and LG Display.
Diversification Opportunities for Daehan Synthetic and LG Display
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daehan and 034220 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Daehan Synthetic 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 Daehan Synthetic Fiber 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 Daehan Synthetic i.e., Daehan Synthetic and LG Display go up and down completely randomly.
Pair Corralation between Daehan Synthetic and LG Display
Assuming the 90 days trading horizon Daehan Synthetic Fiber is expected to generate 0.46 times more return on investment than LG Display. However, Daehan Synthetic Fiber is 2.19 times less risky than LG Display. It trades about -0.08 of its potential returns per unit of risk. LG Display Co is currently generating about -0.27 per unit of risk. If you would invest 11,800,000 in Daehan Synthetic Fiber on September 4, 2024 and sell it today you would lose (150,000) from holding Daehan Synthetic Fiber or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. LG Display Co
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| LG Display |
Daehan Synthetic and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and LG Display
The main advantage of trading using opposite Daehan Synthetic and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic 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.| Daehan Synthetic vs. LG Display Co | Daehan Synthetic vs. Sangsin Energy Display | Daehan Synthetic vs. Okins Electronics Co | Daehan Synthetic vs. Visang Education |
| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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