Correlation Between LG Display and TS Investment
Can any of the company-specific risk be diversified away by investing in both LG Display and TS Investment 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 TS Investment 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 TS Investment Corp, you can compare the effects of market volatilities on LG Display and TS Investment 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 TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and TS Investment.
Diversification Opportunities for LG Display and TS Investment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 034220 and 246690 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp 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 TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of LG Display i.e., LG Display and TS Investment go up and down completely randomly.
Pair Corralation between LG Display and TS Investment
Assuming the 90 days trading horizon LG Display is expected to generate 4.39 times less return on investment than TS Investment. But when comparing it to its historical volatility, LG Display Co is 2.87 times less risky than TS Investment. It trades about 0.06 of its potential returns per unit of risk. TS Investment Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 90,300 in TS Investment Corp on October 11, 2024 and sell it today you would earn a total of 7,700 from holding TS Investment Corp or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. TS Investment Corp
Performance |
| Timeline |
| LG Display |
| TS Investment Corp |
LG Display and TS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and TS Investment
The main advantage of trading using opposite LG Display and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, TS Investment 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 TS Investment will offset losses from the drop in TS Investment's long position.| LG Display vs. Golden Bridge Investment | LG Display vs. Seers Technology | LG Display vs. Coloray International Investment | LG Display vs. Global Standard Technology |
| TS Investment vs. Pureun Mutual Savings | TS Investment vs. CG Hi Tech | TS Investment vs. LG Display Co | TS Investment vs. Coloray International Investment |
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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