Correlation Between JJ SNACK and LG Display
Can any of the company-specific risk be diversified away by investing in both JJ SNACK 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 JJ SNACK and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJ SNACK FOODS and LG Display Co, you can compare the effects of market volatilities on JJ SNACK 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 JJ SNACK with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJ SNACK and LG Display.
Diversification Opportunities for JJ SNACK and LG Display
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JJ1 and LGA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and JJ SNACK 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 JJ SNACK FOODS 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 JJ SNACK i.e., JJ SNACK and LG Display go up and down completely randomly.
Pair Corralation between JJ SNACK and LG Display
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.52 times more return on investment than LG Display. However, JJ SNACK FOODS is 1.94 times less risky than LG Display. It trades about 0.02 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 14,511 in JJ SNACK FOODS on August 30, 2024 and sell it today you would earn a total of 1,789 from holding JJ SNACK FOODS or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. LG Display Co
Performance |
| Timeline |
| JJ SNACK FOODS |
| LG Display |
JJ SNACK and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJ SNACK and LG Display
The main advantage of trading using opposite JJ SNACK and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJ SNACK 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.| JJ SNACK vs. Iridium Communications | JJ SNACK vs. Hemisphere Energy Corp | JJ SNACK vs. SBA Communications Corp | JJ SNACK vs. Perseus Mining Limited |
| LG Display vs. JAPAN TOBACCO UNSPADR12 | LG Display vs. Grupo Carso SAB | LG Display vs. XLMedia PLC | LG Display vs. Dave Busters Entertainment |
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 CEOs Directory module to screen CEOs from public companies around the world.
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