Correlation Between Mount Gibson and LG Display
Can any of the company-specific risk be diversified away by investing in both Mount Gibson 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 Mount Gibson and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and LG Display Co, you can compare the effects of market volatilities on Mount Gibson 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 Mount Gibson with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and LG Display.
Diversification Opportunities for Mount Gibson and LG Display
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mount and LGA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Mount Gibson 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 Mount Gibson Iron 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 Mount Gibson i.e., Mount Gibson and LG Display go up and down completely randomly.
Pair Corralation between Mount Gibson and LG Display
Assuming the 90 days horizon Mount Gibson Iron is expected to generate 2.3 times more return on investment than LG Display. However, Mount Gibson is 2.3 times more volatile than LG Display Co. It trades about 0.09 of its potential returns per unit of risk. LG Display Co is currently generating about 0.01 per unit of risk. If you would invest 17.00 in Mount Gibson Iron on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Mount Gibson Iron or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. LG Display Co
Performance |
| Timeline |
| Mount Gibson Iron |
| LG Display |
Mount Gibson and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and LG Display
The main advantage of trading using opposite Mount Gibson and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson 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.| Mount Gibson vs. GREENX METALS LTD | Mount Gibson vs. MPH Health Care | Mount Gibson vs. OPKO HEALTH | Mount Gibson vs. MCEWEN MINING INC |
| LG Display vs. CHEMICAL INDUSTRIES | LG Display vs. Guidewire Software | LG Display vs. TIANDE CHEMICAL | LG Display vs. Mitsui Chemicals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world |