Correlation Between Vaxcell Bio and LG Display
Can any of the company-specific risk be diversified away by investing in both Vaxcell Bio 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 Vaxcell Bio and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaxcell Bio Therapeutics Co and LG Display Co, you can compare the effects of market volatilities on Vaxcell Bio 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 Vaxcell Bio with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaxcell Bio and LG Display.
Diversification Opportunities for Vaxcell Bio and LG Display
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vaxcell and 034220 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vaxcell Bio Therapeutics 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 Vaxcell Bio 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 Vaxcell Bio Therapeutics 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 Vaxcell Bio i.e., Vaxcell Bio and LG Display go up and down completely randomly.
Pair Corralation between Vaxcell Bio and LG Display
Assuming the 90 days trading horizon Vaxcell Bio is expected to generate 1.22 times less return on investment than LG Display. In addition to that, Vaxcell Bio is 1.43 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 0.13 per unit of volatility. If you would invest 889,000 in LG Display Co on October 9, 2024 and sell it today you would earn a total of 43,000 from holding LG Display Co or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Vaxcell Bio Therapeutics Co vs. LG Display Co
Performance |
| Timeline |
| Vaxcell Bio Therapeu |
| LG Display |
Vaxcell Bio and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaxcell Bio and LG Display
The main advantage of trading using opposite Vaxcell Bio and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaxcell Bio 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.| Vaxcell Bio vs. SM Entertainment Co | Vaxcell Bio vs. HB Technology TD | Vaxcell Bio vs. BIT Computer Co | Vaxcell Bio vs. Barunson Entertainment Arts |
| LG Display vs. Haesung Industrial Co | LG Display vs. Cheryong Industrial CoLtd | LG Display vs. Eagon Industrial Co | LG Display vs. Cube Entertainment |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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