Correlation Between Japan Asia and LG Display
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and LG Display Co, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and LG Display.
Diversification Opportunities for Japan Asia and LG Display
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and LGA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and LG Display go up and down completely randomly.
Pair Corralation between Japan Asia and LG Display
Assuming the 90 days horizon Japan Asia Investment is expected to generate 1.05 times more return on investment than LG Display. However, Japan Asia is 1.05 times more volatile than LG Display Co. It trades about -0.02 of its potential returns per unit of risk. LG Display Co is currently generating about -0.2 per unit of risk. If you would invest 130.00 in Japan Asia Investment on September 14, 2024 and sell it today you would lose (1.00) from holding Japan Asia Investment or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. LG Display Co
Performance |
| Timeline |
| Japan Asia Investment |
| LG Display |
Japan Asia and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and LG Display
The main advantage of trading using opposite Japan Asia and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp | LG Display vs. SIVERS SEMICONDUCTORS AB |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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