Correlation Between LG Display and Hyundai Mobis
Can any of the company-specific risk be diversified away by investing in both LG Display and Hyundai Mobis 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 LG Display and Hyundai Mobis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display and Hyundai Mobis, you can compare the effects of market volatilities on LG Display and Hyundai Mobis 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 LG Display with a short position of Hyundai Mobis. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Hyundai Mobis.
Diversification Opportunities for LG Display and Hyundai Mobis
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 034220 and Hyundai is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding LG Display and Hyundai Mobis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Mobis and LG Display 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 LG Display are associated (or correlated) with Hyundai Mobis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Mobis has no effect on the direction of LG Display i.e., LG Display and Hyundai Mobis go up and down completely randomly.
Pair Corralation between LG Display and Hyundai Mobis
Assuming the 90 days trading horizon LG Display is expected to under-perform the Hyundai Mobis. In addition to that, LG Display is 1.23 times more volatile than Hyundai Mobis. It trades about -0.03 of its total potential returns per unit of risk. Hyundai Mobis is currently generating about 0.03 per unit of volatility. If you would invest 22,263,500 in Hyundai Mobis on September 3, 2024 and sell it today you would earn a total of 2,286,500 from holding Hyundai Mobis or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display vs. Hyundai Mobis
Performance |
| Timeline |
| LG Display |
| Hyundai Mobis |
LG Display and Hyundai Mobis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Hyundai Mobis
The main advantage of trading using opposite LG Display and Hyundai Mobis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Hyundai Mobis 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 Hyundai Mobis will offset losses from the drop in Hyundai Mobis' long position.| LG Display vs. Cuckoo Homesys Co | LG Display vs. Duksan Hi Metal | LG Display vs. Youngsin Metal Industrial | LG Display vs. PJ Metal Co |
| Hyundai Mobis vs. RFTech Co | Hyundai Mobis vs. Intellian Technologies | Hyundai Mobis vs. Woori Technology | Hyundai Mobis vs. Korea Information Engineering |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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