Correlation Between LUMI GRUPPEN and LG Display
Can any of the company-specific risk be diversified away by investing in both LUMI GRUPPEN 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 LUMI GRUPPEN and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUMI GRUPPEN AS and LG Display Co, you can compare the effects of market volatilities on LUMI GRUPPEN 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 LUMI GRUPPEN with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUMI GRUPPEN and LG Display.
Diversification Opportunities for LUMI GRUPPEN and LG Display
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LUMI and LGA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding LUMI GRUPPEN AS and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and LUMI GRUPPEN 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 LUMI GRUPPEN AS 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 LUMI GRUPPEN i.e., LUMI GRUPPEN and LG Display go up and down completely randomly.
Pair Corralation between LUMI GRUPPEN and LG Display
Assuming the 90 days horizon LUMI GRUPPEN AS is expected to generate 2.41 times more return on investment than LG Display. However, LUMI GRUPPEN is 2.41 times more volatile than LG Display Co. It trades about 0.03 of its potential returns per unit of risk. LG Display Co is currently generating about -0.03 per unit of risk. If you would invest 104.00 in LUMI GRUPPEN AS on September 24, 2024 and sell it today you would lose (6.00) from holding LUMI GRUPPEN AS or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LUMI GRUPPEN AS vs. LG Display Co
Performance |
| Timeline |
| LUMI GRUPPEN AS |
| LG Display |
LUMI GRUPPEN and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LUMI GRUPPEN and LG Display
The main advantage of trading using opposite LUMI GRUPPEN and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUMI GRUPPEN 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.| LUMI GRUPPEN vs. LG Display Co | LUMI GRUPPEN vs. CHEMICAL INDUSTRIES | LUMI GRUPPEN vs. NISSAN CHEMICAL IND | LUMI GRUPPEN vs. Nissan Chemical Corp |
| LG Display vs. Magic Software Enterprises | LG Display vs. CyberArk Software | LG Display vs. ATOSS SOFTWARE | LG Display vs. Cass Information Systems |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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