Correlation Between LG Display and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both LG Display and Hankukpackage 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 Hankukpackage 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 Hankukpackage Co, you can compare the effects of market volatilities on LG Display and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Hankukpackage.
Diversification Opportunities for LG Display and Hankukpackage
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 034220 and Hankukpackage is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of LG Display i.e., LG Display and Hankukpackage go up and down completely randomly.
Pair Corralation between LG Display and Hankukpackage
Assuming the 90 days trading horizon LG Display Co is expected to generate 0.99 times more return on investment than Hankukpackage. However, LG Display Co is 1.01 times less risky than Hankukpackage. It trades about -0.05 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.05 per unit of risk. If you would invest 955,000 in LG Display Co on October 14, 2024 and sell it today you would lose (19,000) from holding LG Display Co or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Hankukpackage Co
Performance |
| Timeline |
| LG Display |
| Hankukpackage |
LG Display and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Hankukpackage
The main advantage of trading using opposite LG Display and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.| LG Display vs. Eagle Veterinary Technology | LG Display vs. Lion Chemtech Co | LG Display vs. SEOWONINTECHCoLtd | LG Display vs. FNSTech Co |
| Hankukpackage vs. Seoul Electronics Telecom | Hankukpackage vs. Dongil Metal Co | Hankukpackage vs. Tuksu Engineering ConstructionLtd | Hankukpackage vs. Seoam Machinery Industry |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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