Correlation Between Wonil Special and LG Display
Can any of the company-specific risk be diversified away by investing in both Wonil Special 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 Wonil Special and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonil Special Steel and LG Display Co, you can compare the effects of market volatilities on Wonil Special 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 Wonil Special with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and LG Display.
Diversification Opportunities for Wonil Special and LG Display
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wonil and 034220 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Wonil Special 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 Wonil Special Steel 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 Wonil Special i.e., Wonil Special and LG Display go up and down completely randomly.
Pair Corralation between Wonil Special and LG Display
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.8 times more return on investment than LG Display. However, Wonil Special Steel is 1.25 times less risky than LG Display. It trades about 0.12 of its potential returns per unit of risk. LG Display Co is currently generating about -0.33 per unit of risk. If you would invest 706,000 in Wonil Special Steel on August 31, 2024 and sell it today you would earn a total of 22,000 from holding Wonil Special Steel or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wonil Special Steel vs. LG Display Co
Performance |
| Timeline |
| Wonil Special Steel |
| LG Display |
Wonil Special and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and LG Display
The main advantage of trading using opposite Wonil Special and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special 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.| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Hanwha Solutions | Wonil Special vs. Lotte Chemical Corp |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |