Correlation Between Gaming and LG Display
Can any of the company-specific risk be diversified away by investing in both Gaming 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 Gaming and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and LG Display Co, you can compare the effects of market volatilities on Gaming 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 Gaming with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and LG Display.
Diversification Opportunities for Gaming and LG Display
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaming and LGA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Gaming 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 Gaming and Leisure 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 Gaming i.e., Gaming and LG Display go up and down completely randomly.
Pair Corralation between Gaming and LG Display
Assuming the 90 days horizon Gaming and Leisure is expected to generate 0.78 times more return on investment than LG Display. However, Gaming and Leisure is 1.28 times less risky than LG Display. It trades about -0.01 of its potential returns per unit of risk. LG Display Co is currently generating about -0.16 per unit of risk. If you would invest 4,552 in Gaming and Leisure on October 14, 2024 and sell it today you would lose (50.00) from holding Gaming and Leisure or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. LG Display Co
Performance |
| Timeline |
| Gaming and Leisure |
| LG Display |
Gaming and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and LG Display
The main advantage of trading using opposite Gaming and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming 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.| Gaming vs. American Eagle Outfitters | Gaming vs. Casio Computer CoLtd | Gaming vs. AM EAGLE OUTFITTERS | Gaming vs. Ultra Clean Holdings |
| LG Display vs. PLAYWAY SA ZY 10 | LG Display vs. PLAYTIKA HOLDING DL 01 | LG Display vs. CeoTronics AG | LG Display vs. Gaming and Leisure |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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