Correlation Between Klckner Co and LG Display
Can any of the company-specific risk be diversified away by investing in both Klckner Co 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 Klckner Co and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and LG Display Co, you can compare the effects of market volatilities on Klckner Co 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 Klckner Co with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and LG Display.
Diversification Opportunities for Klckner Co and LG Display
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Klckner and LGA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Klckner Co 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 Klckner Co SE 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 Klckner Co i.e., Klckner Co and LG Display go up and down completely randomly.
Pair Corralation between Klckner Co and LG Display
Assuming the 90 days horizon Klckner Co SE is expected to generate 1.12 times more return on investment than LG Display. However, Klckner Co is 1.12 times more volatile than LG Display Co. It trades about 0.18 of its potential returns per unit of risk. LG Display Co is currently generating about -0.27 per unit of risk. If you would invest 447.00 in Klckner Co SE on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Klckner Co SE or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Klckner Co SE vs. LG Display Co
Performance |
| Timeline |
| Klckner Co SE |
| LG Display |
Klckner Co and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and LG Display
The main advantage of trading using opposite Klckner Co and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co 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.| Klckner Co vs. LG Display Co | Klckner Co vs. Tencent Music Entertainment | Klckner Co vs. JD SPORTS FASH | Klckner Co vs. PT Bank Maybank |
| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp |
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.
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