Correlation Between LG Display and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both LG Display and Samyang Foods 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 Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display Co and Samyang Foods Co, you can compare the effects of market volatilities on LG Display and Samyang Foods 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 Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Samyang Foods.
Diversification Opportunities for LG Display and Samyang Foods
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 034220 and Samyang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods 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 Co are associated (or correlated) with Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of LG Display i.e., LG Display and Samyang Foods go up and down completely randomly.
Pair Corralation between LG Display and Samyang Foods
Assuming the 90 days trading horizon LG Display Co is expected to under-perform the Samyang Foods. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.55 times less risky than Samyang Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Samyang Foods Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11,645,300 in Samyang Foods Co on August 31, 2024 and sell it today you would earn a total of 40,254,700 from holding Samyang Foods Co or generate 345.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
LG Display Co vs. Samyang Foods Co
Performance |
| Timeline |
| LG Display |
| Samyang Foods |
LG Display and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Samyang Foods
The main advantage of trading using opposite LG Display and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
| Samyang Foods vs. AptaBio Therapeutics | Samyang Foods vs. Daewoo SBI SPAC | Samyang Foods vs. Dream Security co | Samyang Foods vs. Microfriend |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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