Correlation Between LG Display and TSE
Can any of the company-specific risk be diversified away by investing in both LG Display and TSE 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 TSE 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 TSE Co, you can compare the effects of market volatilities on LG Display and TSE 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 TSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and TSE.
Diversification Opportunities for LG Display and TSE
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 034220 and TSE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and TSE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSE Co 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 TSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSE Co has no effect on the direction of LG Display i.e., LG Display and TSE go up and down completely randomly.
Pair Corralation between LG Display and TSE
Assuming the 90 days trading horizon LG Display is expected to generate 3.48 times less return on investment than TSE. But when comparing it to its historical volatility, LG Display Co is 1.13 times less risky than TSE. It trades about 0.07 of its potential returns per unit of risk. TSE Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,030,000 in TSE Co on December 4, 2024 and sell it today you would earn a total of 450,000 from holding TSE Co or generate 11.17% 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. TSE Co
Performance |
| Timeline |
| LG Display |
| TSE Co |
LG Display and TSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and TSE
The main advantage of trading using opposite LG Display and TSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, TSE 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 TSE will offset losses from the drop in TSE's long position.| LG Display vs. KEPCO Engineering Construction | LG Display vs. Polaris Office Corp | LG Display vs. Hanmi Semiconductor Co | LG Display vs. Tuksu Engineering ConstructionLtd |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |