Correlation Between LG Display and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both LG Display and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on LG Display and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and DAEDUCK ELECTRONICS.
Diversification Opportunities for LG Display and DAEDUCK ELECTRONICS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 034220 and DAEDUCK is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of LG Display i.e., LG Display and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between LG Display and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon LG Display Co is expected to generate 1.43 times more return on investment than DAEDUCK ELECTRONICS. However, LG Display is 1.43 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.0 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.02 per unit of risk. If you would invest 1,124,183 in LG Display Co on September 13, 2024 and sell it today you would lose (172,183) from holding LG Display Co or give up 15.32% 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. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| LG Display |
| DAEDUCK ELECTRONICS CoLtd |
LG Display and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and DAEDUCK ELECTRONICS
The main advantage of trading using opposite LG Display and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. SK Hynix | LG Display vs. POSCO Holdings |
| DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Sungmoon Electronics Co | DAEDUCK ELECTRONICS vs. Solution Advanced Technology | DAEDUCK ELECTRONICS vs. Busan Industrial Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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