Correlation Between LG Display and Alton Sports
Can any of the company-specific risk be diversified away by investing in both LG Display and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on LG Display and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Alton Sports.
Diversification Opportunities for LG Display and Alton Sports
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 034220 and Alton is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of LG Display i.e., LG Display and Alton Sports go up and down completely randomly.
Pair Corralation between LG Display and Alton Sports
Assuming the 90 days trading horizon LG Display Co is expected to generate 1.42 times more return on investment than Alton Sports. However, LG Display is 1.42 times more volatile than Alton Sports CoLtd. It trades about 0.09 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.1 per unit of risk. If you would invest 925,000 in LG Display Co on November 29, 2024 and sell it today you would earn a total of 29,000 from holding LG Display Co or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Alton Sports CoLtd
Performance |
| Timeline |
| LG Display |
| Alton Sports CoLtd |
LG Display and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Alton Sports
The main advantage of trading using opposite LG Display and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| LG Display vs. Daishin Information Communications | LG Display vs. Lotte Data Communication | LG Display vs. Namhae Chemical | LG Display vs. Innowireless Co |
| Alton Sports vs. Woorim Machinery Co | Alton Sports vs. KCC Engineering Construction | Alton Sports vs. Shinhan Inverse Copper | Alton Sports vs. Keyang Electric Machinery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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