Correlation Between LG Display and HANSOH PHARMAC
Can any of the company-specific risk be diversified away by investing in both LG Display and HANSOH PHARMAC 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 HANSOH PHARMAC 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 HANSOH PHARMAC HD 00001, you can compare the effects of market volatilities on LG Display and HANSOH PHARMAC 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 HANSOH PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and HANSOH PHARMAC.
Diversification Opportunities for LG Display and HANSOH PHARMAC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LGA and HANSOH is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and HANSOH PHARMAC HD 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANSOH PHARMAC HD 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 HANSOH PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANSOH PHARMAC HD has no effect on the direction of LG Display i.e., LG Display and HANSOH PHARMAC go up and down completely randomly.
Pair Corralation between LG Display and HANSOH PHARMAC
Assuming the 90 days horizon LG Display Co is expected to generate 0.34 times more return on investment than HANSOH PHARMAC. However, LG Display Co is 2.92 times less risky than HANSOH PHARMAC. It trades about 0.14 of its potential returns per unit of risk. HANSOH PHARMAC HD 00001 is currently generating about -0.14 per unit of risk. If you would invest 304.00 in LG Display Co on October 13, 2024 and sell it today you would earn a total of 10.00 from holding LG Display Co or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. HANSOH PHARMAC HD 00001
Performance |
| Timeline |
| LG Display |
| HANSOH PHARMAC HD |
LG Display and HANSOH PHARMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and HANSOH PHARMAC
The main advantage of trading using opposite LG Display and HANSOH PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, HANSOH PHARMAC 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 HANSOH PHARMAC will offset losses from the drop in HANSOH PHARMAC's long position.| LG Display vs. United Utilities Group | LG Display vs. MYFAIR GOLD P | LG Display vs. FAIR ISAAC | LG Display vs. Ryanair Holdings plc |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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