Correlation Between Kosdaq Composite and LG Display
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By analyzing existing cross correlation between Kosdaq Composite Index and LG Display Co, you can compare the effects of market volatilities on Kosdaq Composite 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 Kosdaq Composite with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and LG Display.
Diversification Opportunities for Kosdaq Composite and LG Display
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and 034220 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Kosdaq Composite 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 Kosdaq Composite Index 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 Kosdaq Composite i.e., Kosdaq Composite and LG Display go up and down completely randomly.
Pair Corralation between Kosdaq Composite and LG Display
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 1.01 times more return on investment than LG Display. However, Kosdaq Composite is 1.01 times more volatile than LG Display Co. It trades about -0.25 of its potential returns per unit of risk. LG Display Co is currently generating about -0.33 per unit of risk. If you would invest 74,306 in Kosdaq Composite Index on September 1, 2024 and sell it today you would lose (6,444) from holding Kosdaq Composite Index or give up 8.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. LG Display Co
Performance |
| Timeline |
Kosdaq Composite and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
LG Display Co
Pair trading matchups for LG Display
Pair Trading with Kosdaq Composite and LG Display
The main advantage of trading using opposite Kosdaq Composite and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite 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.| Kosdaq Composite vs. Golden Bridge Investment | Kosdaq Composite vs. Lotte Data Communication | Kosdaq Composite vs. E Investment Development | Kosdaq Composite vs. Stic Investments |
| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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