Correlation Between LG Display and HYUNDAI BIOLAND
Can any of the company-specific risk be diversified away by investing in both LG Display and HYUNDAI BIOLAND 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 BIOLAND 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 BIOLAND CoLtd, you can compare the effects of market volatilities on LG Display and HYUNDAI BIOLAND 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 BIOLAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and HYUNDAI BIOLAND.
Diversification Opportunities for LG Display and HYUNDAI BIOLAND
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 034220 and HYUNDAI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LG Display and HYUNDAI BIOLAND CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI BIOLAND CoLtd 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 BIOLAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI BIOLAND CoLtd has no effect on the direction of LG Display i.e., LG Display and HYUNDAI BIOLAND go up and down completely randomly.
Pair Corralation between LG Display and HYUNDAI BIOLAND
Assuming the 90 days trading horizon LG Display is expected to generate 32.01 times less return on investment than HYUNDAI BIOLAND. But when comparing it to its historical volatility, LG Display is 1.38 times less risky than HYUNDAI BIOLAND. It trades about 0.0 of its potential returns per unit of risk. HYUNDAI BIOLAND CoLtd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 421,903 in HYUNDAI BIOLAND CoLtd on November 11, 2024 and sell it today you would earn a total of 47,597 from holding HYUNDAI BIOLAND CoLtd or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display vs. HYUNDAI BIOLAND CoLtd
Performance |
| Timeline |
| LG Display |
| HYUNDAI BIOLAND CoLtd |
LG Display and HYUNDAI BIOLAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and HYUNDAI BIOLAND
The main advantage of trading using opposite LG Display and HYUNDAI BIOLAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, HYUNDAI BIOLAND 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 BIOLAND will offset losses from the drop in HYUNDAI BIOLAND's long position.| LG Display vs. Daehan Steel | LG Display vs. Haitai Confectionery Foods | LG Display vs. Sempio Foods Co | LG Display vs. BooKook Steel Co |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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