Correlation Between IQuest and LG Display
Can any of the company-specific risk be diversified away by investing in both IQuest 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 IQuest and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and LG Display, you can compare the effects of market volatilities on IQuest 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 IQuest with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and LG Display.
Diversification Opportunities for IQuest and LG Display
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between IQuest and 034220 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and LG Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and IQuest 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 IQuest 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 IQuest i.e., IQuest and LG Display go up and down completely randomly.
Pair Corralation between IQuest and LG Display
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.08 times more return on investment than LG Display. However, IQuest is 1.08 times more volatile than LG Display. It trades about -0.02 of its potential returns per unit of risk. LG Display is currently generating about -0.02 per unit of risk. If you would invest 348,993 in IQuest Co on August 26, 2024 and sell it today you would lose (99,493) from holding IQuest Co or give up 28.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. LG Display
Performance |
| Timeline |
| IQuest |
| LG Display |
IQuest and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and LG Display
The main advantage of trading using opposite IQuest and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest 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.| IQuest vs. Choil Aluminum | IQuest vs. Dongbang Transport Logistics | IQuest vs. Kukil Metal Co | IQuest vs. Genie Music |
| LG Display vs. Korea Real Estate | LG Display vs. Korea Ratings Co | LG Display vs. IQuest Co | LG Display vs. Wonbang Tech Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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