Correlation Between HSD Engine and LG Display
Can any of the company-specific risk be diversified away by investing in both HSD Engine 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 HSD Engine and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSD Engine Co and LG Display Co, you can compare the effects of market volatilities on HSD Engine 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 HSD Engine with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSD Engine and LG Display.
Diversification Opportunities for HSD Engine and LG Display
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSD and 034220 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HSD Engine 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 HSD Engine 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 HSD Engine 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 HSD Engine i.e., HSD Engine and LG Display go up and down completely randomly.
Pair Corralation between HSD Engine and LG Display
Assuming the 90 days trading horizon HSD Engine Co is expected to generate 1.58 times more return on investment than LG Display. However, HSD Engine is 1.58 times more volatile than LG Display Co. It trades about 0.09 of its potential returns per unit of risk. LG Display Co is currently generating about -0.02 per unit of risk. If you would invest 1,510,000 in HSD Engine Co on September 14, 2024 and sell it today you would earn a total of 84,000 from holding HSD Engine Co or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSD Engine Co vs. LG Display Co
Performance |
| Timeline |
| HSD Engine |
| LG Display |
HSD Engine and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSD Engine and LG Display
The main advantage of trading using opposite HSD Engine and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSD Engine 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.| HSD Engine vs. LG Display Co | HSD Engine vs. SK Chemicals Co | HSD Engine vs. Shinhan Inverse Copper | HSD Engine vs. Formetal Co |
| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. SK Hynix | LG Display vs. POSCO Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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