Correlation Between Casio Computer and LG Display
Can any of the company-specific risk be diversified away by investing in both Casio Computer 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 Casio Computer and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casio Computer Co and LG Display Co, you can compare the effects of market volatilities on Casio Computer 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 Casio Computer with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and LG Display.
Diversification Opportunities for Casio Computer and LG Display
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Casio and LPL is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer 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 Casio Computer 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 Casio Computer 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 Casio Computer i.e., Casio Computer and LG Display go up and down completely randomly.
Pair Corralation between Casio Computer and LG Display
Assuming the 90 days horizon Casio Computer Co is expected to generate 1.45 times more return on investment than LG Display. However, Casio Computer is 1.45 times more volatile than LG Display Co. It trades about -0.06 of its potential returns per unit of risk. LG Display Co is currently generating about -0.25 per unit of risk. If you would invest 7,288 in Casio Computer Co on August 30, 2024 and sell it today you would lose (243.00) from holding Casio Computer Co or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer Co vs. LG Display Co
Performance |
| Timeline |
| Casio Computer |
| LG Display |
Casio Computer and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and LG Display
The main advantage of trading using opposite Casio Computer and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer 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.| Casio Computer vs. Apple Inc | Casio Computer vs. Sharp | Casio Computer vs. TCL Electronics Holdings | Casio Computer vs. Xiaomi Corp |
| LG Display vs. VOXX International | LG Display vs. Vizio Holding Corp | LG Display vs. Turtle Beach Corp | LG Display vs. Emerson Radio |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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