Correlation Between CTP NV and LG Display
Can any of the company-specific risk be diversified away by investing in both CTP NV 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 CTP NV and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTP NV EO and LG Display Co, you can compare the effects of market volatilities on CTP NV 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 CTP NV with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTP NV and LG Display.
Diversification Opportunities for CTP NV and LG Display
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTP and LGA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CTP NV EO and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and CTP NV 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 CTP NV EO 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 CTP NV i.e., CTP NV and LG Display go up and down completely randomly.
Pair Corralation between CTP NV and LG Display
Assuming the 90 days horizon CTP NV EO is expected to generate 0.54 times more return on investment than LG Display. However, CTP NV EO is 1.84 times less risky than LG Display. It trades about 0.06 of its potential returns per unit of risk. LG Display Co is currently generating about -0.05 per unit of risk. If you would invest 1,165 in CTP NV EO on September 12, 2024 and sell it today you would earn a total of 345.00 from holding CTP NV EO or generate 29.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CTP NV EO vs. LG Display Co
Performance |
Timeline |
CTP NV EO |
LG Display |
CTP NV and LG Display Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CTP NV and LG Display
The main advantage of trading using opposite CTP NV and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTP NV 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.CTP NV vs. Superior Plus Corp | CTP NV vs. NMI Holdings | CTP NV vs. SIVERS SEMICONDUCTORS AB | CTP NV vs. NorAm Drilling AS |
LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp |
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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