Correlation Between N Citron and LG Display
Can any of the company-specific risk be diversified away by investing in both N Citron 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 N Citron and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N Citron and LG Display, you can compare the effects of market volatilities on N Citron 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 N Citron with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of N Citron and LG Display.
Diversification Opportunities for N Citron and LG Display
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 101400 and 034220 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding N Citron and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and N Citron 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 N Citron 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 N Citron i.e., N Citron and LG Display go up and down completely randomly.
Pair Corralation between N Citron and LG Display
Assuming the 90 days trading horizon N Citron is expected to generate 1.01 times more return on investment than LG Display. However, N Citron is 1.01 times more volatile than LG Display. It trades about -0.13 of its potential returns per unit of risk. LG Display is currently generating about -0.33 per unit of risk. If you would invest 41,900 in N Citron on September 1, 2024 and sell it today you would lose (1,900) from holding N Citron or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
N Citron vs. LG Display
Performance |
| Timeline |
| N Citron |
| LG Display |
N Citron and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N Citron and LG Display
The main advantage of trading using opposite N Citron and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N Citron 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.| N Citron vs. Tuksu Engineering ConstructionLtd | N Citron vs. Dongwoo Farm To | N Citron vs. Korea Shipbuilding Offshore | N Citron vs. Seohee Construction Co |
| LG Display vs. Dongsin Engineering Construction | LG Display vs. Doosan Fuel Cell | LG Display vs. Daishin Balance 1 | LG Display vs. Total Soft Bank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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