Correlation Between Youngsin Metal and LG Display
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal 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 Youngsin Metal and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngsin Metal Industrial and LG Display, you can compare the effects of market volatilities on Youngsin Metal 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 Youngsin Metal with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and LG Display.
Diversification Opportunities for Youngsin Metal and LG Display
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngsin and 034220 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Youngsin Metal 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 Youngsin Metal Industrial 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 Youngsin Metal i.e., Youngsin Metal and LG Display go up and down completely randomly.
Pair Corralation between Youngsin Metal and LG Display
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the LG Display. In addition to that, Youngsin Metal is 1.93 times more volatile than LG Display. It trades about -0.3 of its total potential returns per unit of risk. LG Display is currently generating about -0.27 per unit of volatility. If you would invest 1,045,000 in LG Display on September 4, 2024 and sell it today you would lose (89,000) from holding LG Display or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. LG Display
Performance |
| Timeline |
| Youngsin Metal Industrial |
| LG Display |
Youngsin Metal and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and LG Display
The main advantage of trading using opposite Youngsin Metal and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal 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.| Youngsin Metal vs. LG Display | Youngsin Metal vs. Hyundai Motor | Youngsin Metal vs. Hyundai Motor Co | Youngsin Metal vs. Hyundai Motor Co |
| LG Display vs. Sam Yang Foods | LG Display vs. Polaris Office Corp | LG Display vs. Sewoon Medical Co | LG Display vs. Okins Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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