Correlation Between CyberArk Software and LG Display
Can any of the company-specific risk be diversified away by investing in both CyberArk Software 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 CyberArk Software and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberArk Software and LG Display Co, you can compare the effects of market volatilities on CyberArk Software 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 CyberArk Software with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and LG Display.
Diversification Opportunities for CyberArk Software and LG Display
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CyberArk and LGA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and CyberArk Software 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 CyberArk Software 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 CyberArk Software i.e., CyberArk Software and LG Display go up and down completely randomly.
Pair Corralation between CyberArk Software and LG Display
Assuming the 90 days trading horizon CyberArk Software is expected to generate 0.97 times more return on investment than LG Display. However, CyberArk Software is 1.03 times less risky than LG Display. It trades about 0.09 of its potential returns per unit of risk. LG Display Co is currently generating about -0.02 per unit of risk. If you would invest 12,570 in CyberArk Software on September 24, 2024 and sell it today you would earn a total of 17,410 from holding CyberArk Software or generate 138.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberArk Software vs. LG Display Co
Performance |
| Timeline |
| CyberArk Software |
| LG Display |
CyberArk Software and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberArk Software and LG Display
The main advantage of trading using opposite CyberArk Software and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software 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.| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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