Correlation Between Namyang Dairy and LG Display
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy 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 Namyang Dairy and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and LG Display, you can compare the effects of market volatilities on Namyang Dairy 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 Namyang Dairy with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and LG Display.
Diversification Opportunities for Namyang Dairy and LG Display
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Namyang and 034220 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy i.e., Namyang Dairy and LG Display go up and down completely randomly.
Pair Corralation between Namyang Dairy and LG Display
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 0.4 times more return on investment than LG Display. However, Namyang Dairy is 2.48 times less risky than LG Display. It trades about -0.17 of its potential returns per unit of risk. LG Display is currently generating about -0.13 per unit of risk. If you would invest 7,250,000 in Namyang Dairy on January 13, 2025 and sell it today you would lose (380,000) from holding Namyang Dairy or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namyang Dairy vs. LG Display
Performance |
| Timeline |
| Namyang Dairy |
| LG Display |
Namyang Dairy and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and LG Display
The main advantage of trading using opposite Namyang Dairy and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy 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.| Namyang Dairy vs. Samyang Foods Co | Namyang Dairy vs. Digital Imaging Technology | Namyang Dairy vs. Eugene Technology CoLtd | Namyang Dairy vs. People Technology |
| LG Display vs. Jb Financial | LG Display vs. Dgb Financial | LG Display vs. Insung Information Co | LG Display vs. DB Insurance 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |