Correlation Between LG Display and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both LG Display and Cube Entertainment 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 Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display and Cube Entertainment, you can compare the effects of market volatilities on LG Display and Cube Entertainment 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 Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Cube Entertainment.
Diversification Opportunities for LG Display and Cube Entertainment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 034220 and Cube is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding LG Display and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment 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 Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of LG Display i.e., LG Display and Cube Entertainment go up and down completely randomly.
Pair Corralation between LG Display and Cube Entertainment
Assuming the 90 days trading horizon LG Display is expected to under-perform the Cube Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, LG Display is 1.31 times less risky than Cube Entertainment. The stock trades about -0.04 of its potential returns per unit of risk. The Cube Entertainment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,180,000 in Cube Entertainment on September 12, 2024 and sell it today you would lose (720,000) from holding Cube Entertainment or give up 33.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display vs. Cube Entertainment
Performance |
| Timeline |
| LG Display |
| Cube Entertainment |
LG Display and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Cube Entertainment
The main advantage of trading using opposite LG Display and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Cube Entertainment 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 Cube Entertainment will offset losses from the drop in Cube Entertainment's long position.| LG Display vs. Cube Entertainment | LG Display vs. Dreamus Company | LG Display vs. LG Energy Solution | LG Display vs. Dongwon System |
| Cube Entertainment vs. Mobileleader CoLtd | Cube Entertainment vs. Dongwon Metal Co | Cube Entertainment vs. KT Submarine Telecom | Cube Entertainment vs. Hanjoo Light Metal |
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.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |