Correlation Between Han Kook and LG Display
Can any of the company-specific risk be diversified away by investing in both Han Kook 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 Han Kook and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Steel and LG Display Co, you can compare the effects of market volatilities on Han Kook 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 Han Kook with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and LG Display.
Diversification Opportunities for Han Kook and LG Display
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Han and 034220 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook 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 Han Kook 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 Han Kook 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 Han Kook i.e., Han Kook and LG Display go up and down completely randomly.
Pair Corralation between Han Kook and LG Display
Assuming the 90 days trading horizon Han Kook Steel is expected to under-perform the LG Display. In addition to that, Han Kook is 1.33 times more volatile than LG Display Co. It trades about -0.04 of its total potential returns per unit of risk. LG Display Co is currently generating about -0.03 per unit of volatility. If you would invest 1,274,248 in LG Display Co on September 14, 2024 and sell it today you would lose (322,248) from holding LG Display Co or give up 25.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. LG Display Co
Performance |
| Timeline |
| Han Kook Steel |
| LG Display |
Han Kook and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and LG Display
The main advantage of trading using opposite Han Kook and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook 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.| Han Kook vs. Dong Il Steel | Han Kook vs. Seah Steel Corp | Han Kook vs. Ni Steel | Han Kook vs. Korea Steel Co |
| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. SK Hynix | LG Display vs. POSCO Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |