Correlation Between LG Display and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both LG Display and Sungchang Autotech 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 Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display and Sungchang Autotech Co, you can compare the effects of market volatilities on LG Display and Sungchang Autotech 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 Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Sungchang Autotech.
Diversification Opportunities for LG Display and Sungchang Autotech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 034220 and Sungchang is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LG Display and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech 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 Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of LG Display i.e., LG Display and Sungchang Autotech go up and down completely randomly.
Pair Corralation between LG Display and Sungchang Autotech
Assuming the 90 days trading horizon LG Display is expected to generate 1.2 times more return on investment than Sungchang Autotech. However, LG Display is 1.2 times more volatile than Sungchang Autotech Co. It trades about -0.03 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.04 per unit of risk. If you would invest 1,228,000 in LG Display on September 2, 2024 and sell it today you would lose (280,000) from holding LG Display or give up 22.8% 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. Sungchang Autotech Co
Performance |
| Timeline |
| LG Display |
| Sungchang Autotech |
LG Display and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Sungchang Autotech
The main advantage of trading using opposite LG Display and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech'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 |
| Sungchang Autotech vs. LG Display | Sungchang Autotech vs. Hyundai Motor Co | Sungchang Autotech vs. Hyundai Motor Co | Sungchang Autotech 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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