Correlation Between Dongil Technology and LG Display
Can any of the company-specific risk be diversified away by investing in both Dongil Technology 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 Dongil Technology and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Technology and LG Display Co, you can compare the effects of market volatilities on Dongil Technology 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 Dongil Technology with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Technology and LG Display.
Diversification Opportunities for Dongil Technology and LG Display
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongil and 034220 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Technology and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Dongil Technology 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 Dongil Technology 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 Dongil Technology i.e., Dongil Technology and LG Display go up and down completely randomly.
Pair Corralation between Dongil Technology and LG Display
Assuming the 90 days trading horizon Dongil Technology is expected to under-perform the LG Display. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Technology is 2.68 times less risky than LG Display. The stock trades about -0.4 of its potential returns per unit of risk. The LG Display Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 934,000 in LG Display Co on November 8, 2024 and sell it today you would earn a total of 34,000 from holding LG Display Co or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Technology vs. LG Display Co
Performance |
| Timeline |
| Dongil Technology |
| LG Display |
Dongil Technology and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Technology and LG Display
The main advantage of trading using opposite Dongil Technology and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Technology 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.| Dongil Technology vs. SK Chemicals Co | Dongil Technology vs. Namhwa Industrial Co | Dongil Technology vs. Hyundai Industrial Co | Dongil Technology vs. Kukdong Oil Chemicals |
| LG Display vs. Daejoo Electronic Materials | LG Display vs. UJU Electronics Co | LG Display vs. Daeduck Electronics Co | LG Display vs. Ssangyong Information Communication |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |