Correlation Between Aya Gold and LG Display
Can any of the company-specific risk be diversified away by investing in both Aya Gold 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 Aya Gold and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aya Gold Silver and LG Display Co, you can compare the effects of market volatilities on Aya Gold 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 Aya Gold with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and LG Display.
Diversification Opportunities for Aya Gold and LG Display
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aya and LGA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Aya Gold 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 Aya Gold Silver 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 Aya Gold i.e., Aya Gold and LG Display go up and down completely randomly.
Pair Corralation between Aya Gold and LG Display
Assuming the 90 days trading horizon Aya Gold Silver is expected to under-perform the LG Display. In addition to that, Aya Gold is 2.09 times more volatile than LG Display Co. It trades about -0.07 of its total potential returns per unit of risk. LG Display Co is currently generating about -0.14 per unit of volatility. If you would invest 328.00 in LG Display Co on October 16, 2024 and sell it today you would lose (28.00) from holding LG Display Co or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aya Gold Silver vs. LG Display Co
Performance |
| Timeline |
| Aya Gold Silver |
| LG Display |
Aya Gold and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aya Gold and LG Display
The main advantage of trading using opposite Aya Gold and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aya Gold 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.| Aya Gold vs. FLOW TRADERS LTD | Aya Gold vs. VARIOUS EATERIES LS | Aya Gold vs. Luckin Coffee | Aya Gold vs. EBRO FOODS |
| LG Display vs. Globex Mining Enterprises | LG Display vs. Eurasia Mining Plc | LG Display vs. Aya Gold Silver | LG Display vs. CODERE ONLINE LUX |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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