Correlation Between Haesung Industrial and LG Display
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and LG Display 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 Haesung Industrial and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and LG Display Co, you can compare the effects of market volatilities on Haesung Industrial and LG Display 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 Haesung Industrial with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and LG Display.
Diversification Opportunities for Haesung Industrial and LG Display
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Haesung and 034220 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Haesung Industrial 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 Haesung Industrial Co are associated (or correlated) with LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and LG Display go up and down completely randomly.
Pair Corralation between Haesung Industrial and LG Display
Assuming the 90 days trading horizon Haesung Industrial Co is expected to generate 0.86 times more return on investment than LG Display. However, Haesung Industrial Co is 1.16 times less risky than LG Display. It trades about 0.06 of its potential returns per unit of risk. LG Display Co is currently generating about -0.13 per unit of risk. If you would invest 591,000 in Haesung Industrial Co on October 25, 2024 and sell it today you would earn a total of 6,000 from holding Haesung Industrial Co or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. LG Display Co
Performance |
| Timeline |
| Haesung Industrial |
| LG Display |
Haesung Industrial and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and LG Display
The main advantage of trading using opposite Haesung Industrial and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. RPBio Inc | Haesung Industrial vs. Finebesteel |
| LG Display vs. KB Financial Group | LG Display vs. Shinhan Financial Group | LG Display vs. Hana Financial | LG Display vs. Woori Financial Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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