Correlation Between Samwha Electronics and LG Display
Can any of the company-specific risk be diversified away by investing in both Samwha Electronics 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 Samwha Electronics and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samwha Electronics Co and LG Display Co, you can compare the effects of market volatilities on Samwha Electronics 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 Samwha Electronics with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samwha Electronics and LG Display.
Diversification Opportunities for Samwha Electronics and LG Display
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samwha and 034220 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samwha Electronics Co and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Samwha Electronics 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 Samwha Electronics Co 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 Samwha Electronics i.e., Samwha Electronics and LG Display go up and down completely randomly.
Pair Corralation between Samwha Electronics and LG Display
Assuming the 90 days trading horizon Samwha Electronics Co is expected to generate 4.32 times more return on investment than LG Display. However, Samwha Electronics is 4.32 times more volatile than LG Display Co. It trades about 0.07 of its potential returns per unit of risk. LG Display Co is currently generating about -0.12 per unit of risk. If you would invest 294,000 in Samwha Electronics Co on August 29, 2024 and sell it today you would earn a total of 18,000 from holding Samwha Electronics Co or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samwha Electronics Co vs. LG Display Co
Performance |
| Timeline |
| Samwha Electronics |
| LG Display |
Samwha Electronics and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samwha Electronics and LG Display
The main advantage of trading using opposite Samwha Electronics and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samwha Electronics 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.| Samwha Electronics vs. AptaBio Therapeutics | Samwha Electronics vs. Daewoo SBI SPAC | Samwha Electronics vs. Dream Security co | Samwha Electronics vs. Microfriend |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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