Correlation Between LG Display and WFD Unibail
Can any of the company-specific risk be diversified away by investing in both LG Display and WFD Unibail 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 LG Display and WFD Unibail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display Co and WFD Unibail Rodamco, you can compare the effects of market volatilities on LG Display and WFD Unibail 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 LG Display with a short position of WFD Unibail. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and WFD Unibail.
Diversification Opportunities for LG Display and WFD Unibail
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LGA and WFD is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and WFD Unibail Rodamco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WFD Unibail Rodamco and LG Display 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 LG Display Co are associated (or correlated) with WFD Unibail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WFD Unibail Rodamco has no effect on the direction of LG Display i.e., LG Display and WFD Unibail go up and down completely randomly.
Pair Corralation between LG Display and WFD Unibail
Assuming the 90 days horizon LG Display Co is expected to under-perform the WFD Unibail. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.02 times less risky than WFD Unibail. The stock trades about -0.19 of its potential returns per unit of risk. The WFD Unibail Rodamco is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,450 in WFD Unibail Rodamco on September 1, 2024 and sell it today you would earn a total of 288.00 from holding WFD Unibail Rodamco or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LG Display Co vs. WFD Unibail Rodamco
Performance |
| Timeline |
| LG Display |
| WFD Unibail Rodamco |
LG Display and WFD Unibail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and WFD Unibail
The main advantage of trading using opposite LG Display and WFD Unibail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, WFD Unibail 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 WFD Unibail will offset losses from the drop in WFD Unibail's long position.| LG Display vs. Apple Inc | LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co |
| WFD Unibail vs. X FAB Silicon Foundries | WFD Unibail vs. ANTA SPORTS PRODUCT | WFD Unibail vs. LG Display Co | WFD Unibail vs. VIAPLAY GROUP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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