Correlation Between Academy Sports and LG Display
Can any of the company-specific risk be diversified away by investing in both Academy Sports 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 Academy Sports and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports Outdoors and LG Display Co, you can compare the effects of market volatilities on Academy Sports 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 Academy Sports with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and LG Display.
Diversification Opportunities for Academy Sports and LG Display
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Academy and LPL is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Academy Sports 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 Academy Sports Outdoors 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 Academy Sports i.e., Academy Sports and LG Display go up and down completely randomly.
Pair Corralation between Academy Sports and LG Display
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the LG Display. In addition to that, Academy Sports is 1.68 times more volatile than LG Display Co. It trades about -0.14 of its total potential returns per unit of risk. LG Display Co is currently generating about 0.14 per unit of volatility. If you would invest 310.00 in LG Display Co on November 3, 2024 and sell it today you would earn a total of 13.00 from holding LG Display Co or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. LG Display Co
Performance |
| Timeline |
| Academy Sports Outdoors |
| LG Display |
Academy Sports and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and LG Display
The main advantage of trading using opposite Academy Sports and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports 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.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| LG Display vs. VOXX International | LG Display vs. Emerson Radio | LG Display vs. Universal Electronics | LG Display vs. Sonos Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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