Correlation Between LG Display and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both LG Display and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on LG Display and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Kukil Metal.
Diversification Opportunities for LG Display and Kukil Metal
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 034220 and Kukil is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of LG Display i.e., LG Display and Kukil Metal go up and down completely randomly.
Pair Corralation between LG Display and Kukil Metal
Assuming the 90 days trading horizon LG Display Co is expected to generate 0.92 times more return on investment than Kukil Metal. However, LG Display Co is 1.09 times less risky than Kukil Metal. It trades about -0.12 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.3 per unit of risk. If you would invest 1,036,000 in LG Display Co on August 29, 2024 and sell it today you would lose (43,000) from holding LG Display Co or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Kukil Metal Co
Performance |
| Timeline |
| LG Display |
| Kukil Metal |
LG Display and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Kukil Metal
The main advantage of trading using opposite LG Display and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
| Kukil Metal vs. Samlip General Foods | Kukil Metal vs. Sangsin Energy Display | Kukil Metal vs. Iljin Display | Kukil Metal vs. Dongbang Transport Logistics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |