Correlation Between LG Display and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both LG Display and Seoyon Topmetal 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 Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display and Seoyon Topmetal Co, you can compare the effects of market volatilities on LG Display and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Seoyon Topmetal.
Diversification Opportunities for LG Display and Seoyon Topmetal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 034220 and Seoyon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding LG Display and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of LG Display i.e., LG Display and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between LG Display and Seoyon Topmetal
Assuming the 90 days trading horizon LG Display is expected to under-perform the Seoyon Topmetal. But the stock apears to be less risky and, when comparing its historical volatility, LG Display is 1.63 times less risky than Seoyon Topmetal. The stock trades about -0.26 of its potential returns per unit of risk. The Seoyon Topmetal Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 380,000 in Seoyon Topmetal Co on September 2, 2024 and sell it today you would lose (14,000) from holding Seoyon Topmetal Co or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display vs. Seoyon Topmetal Co
Performance |
| Timeline |
| LG Display |
| Seoyon Topmetal |
LG Display and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Seoyon Topmetal
The main advantage of trading using opposite LG Display and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| LG Display vs. Dongsin Engineering Construction | LG Display vs. Doosan Fuel Cell | LG Display vs. Daishin Balance 1 | LG Display vs. Total Soft Bank |
| Seoyon Topmetal vs. LG Display | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Adaptive Plasma Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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