Correlation Between Dongil Metal and LG Display
Can any of the company-specific risk be diversified away by investing in both Dongil Metal 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 Dongil Metal and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and LG Display Co, you can compare the effects of market volatilities on Dongil Metal 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 Dongil Metal with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and LG Display.
Diversification Opportunities for Dongil Metal and LG Display
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongil and 034220 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal 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 Dongil Metal 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 Dongil Metal 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 Dongil Metal i.e., Dongil Metal and LG Display go up and down completely randomly.
Pair Corralation between Dongil Metal and LG Display
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 1.67 times more return on investment than LG Display. However, Dongil Metal is 1.67 times more volatile than LG Display Co. It trades about -0.01 of its potential returns per unit of risk. LG Display Co is currently generating about -0.07 per unit of risk. If you would invest 816,000 in Dongil Metal Co on November 8, 2024 and sell it today you would lose (10,000) from holding Dongil Metal Co or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. LG Display Co
Performance |
| Timeline |
| Dongil Metal |
| LG Display |
Dongil Metal and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and LG Display
The main advantage of trading using opposite Dongil Metal and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal 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.| Dongil Metal vs. Tamul Multimedia Co | Dongil Metal vs. T3 Entertainment Co | Dongil Metal vs. Shinhan Financial Group | Dongil Metal vs. Korea Information Communications |
| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |