Correlation Between Citic Telecom and LG Display
Can any of the company-specific risk be diversified away by investing in both Citic Telecom 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 Citic Telecom and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citic Telecom International and LG Display Co, you can compare the effects of market volatilities on Citic Telecom 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 Citic Telecom with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and LG Display.
Diversification Opportunities for Citic Telecom and LG Display
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and LGA is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Citic Telecom 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 Citic Telecom International 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 Citic Telecom i.e., Citic Telecom and LG Display go up and down completely randomly.
Pair Corralation between Citic Telecom and LG Display
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 3.03 times more return on investment than LG Display. However, Citic Telecom is 3.03 times more volatile than LG Display Co. It trades about 0.07 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 8.69 in Citic Telecom International on September 12, 2024 and sell it today you would earn a total of 18.31 from holding Citic Telecom International or generate 210.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. LG Display Co
Performance |
| Timeline |
| Citic Telecom Intern |
| LG Display |
Citic Telecom and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and LG Display
The main advantage of trading using opposite Citic Telecom and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom 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.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |