Correlation Between Koryo Credit and LG Display
Can any of the company-specific risk be diversified away by investing in both Koryo Credit 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 Koryo Credit and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and LG Display, you can compare the effects of market volatilities on Koryo Credit 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 Koryo Credit with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and LG Display.
Diversification Opportunities for Koryo Credit and LG Display
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Koryo and 034220 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Koryo Credit 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 Koryo Credit Information 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 Koryo Credit i.e., Koryo Credit and LG Display go up and down completely randomly.
Pair Corralation between Koryo Credit and LG Display
Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.62 times more return on investment than LG Display. However, Koryo Credit Information is 1.61 times less risky than LG Display. It trades about 0.0 of its potential returns per unit of risk. LG Display is currently generating about -0.01 per unit of risk. If you would invest 1,033,718 in Koryo Credit Information on September 12, 2024 and sell it today you would lose (29,718) from holding Koryo Credit Information or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. LG Display
Performance |
| Timeline |
| Koryo Credit Information |
| LG Display |
Koryo Credit and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and LG Display
The main advantage of trading using opposite Koryo Credit and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit 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.| Koryo Credit vs. Korea New Network | Koryo Credit vs. Solution Advanced Technology | Koryo Credit vs. Busan Industrial Co | Koryo Credit vs. Busan Ind |
| LG Display vs. Cube Entertainment | LG Display vs. Dreamus Company | LG Display vs. LG Energy Solution | LG Display vs. Dongwon System |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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