Correlation Between KENEDIX OFFICE and LG Display
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and LG Display Co, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and LG Display.
Diversification Opportunities for KENEDIX OFFICE and LG Display
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KENEDIX and LGA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and LG Display go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and LG Display
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.48 times more return on investment than LG Display. However, KENEDIX OFFICE INV is 2.09 times less risky than LG Display. It trades about -0.04 of its potential returns per unit of risk. LG Display Co is currently generating about -0.03 per unit of risk. If you would invest 106,000 in KENEDIX OFFICE INV on August 25, 2024 and sell it today you would lose (18,000) from holding KENEDIX OFFICE INV or give up 16.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. LG Display Co
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| LG Display |
KENEDIX OFFICE and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and LG Display
The main advantage of trading using opposite KENEDIX OFFICE and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. Xenia Hotels Resorts | KENEDIX OFFICE vs. AEGEAN AIRLINES | KENEDIX OFFICE vs. MIRAMAR HOTEL INV | KENEDIX OFFICE vs. MHP Hotel AG |
| LG Display vs. AIR PRODCHEMICALS | LG Display vs. Sekisui Chemical Co | LG Display vs. Mitsubishi Gas Chemical | LG Display vs. JAPAN TOBACCO UNSPADR12 |
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.
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 | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |