Correlation Between LG Display and Major Drilling
Can any of the company-specific risk be diversified away by investing in both LG Display and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on LG Display and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Major Drilling.
Diversification Opportunities for LG Display and Major Drilling
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LGA and Major is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of LG Display i.e., LG Display and Major Drilling go up and down completely randomly.
Pair Corralation between LG Display and Major Drilling
Assuming the 90 days horizon LG Display Co is expected to under-perform the Major Drilling. In addition to that, LG Display is 1.07 times more volatile than Major Drilling Group. It trades about -0.03 of its total potential returns per unit of risk. Major Drilling Group is currently generating about -0.01 per unit of volatility. If you would invest 710.00 in Major Drilling Group on September 4, 2024 and sell it today you would lose (160.00) from holding Major Drilling Group or give up 22.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Major Drilling Group
Performance |
| Timeline |
| LG Display |
| Major Drilling Group |
LG Display and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Major Drilling
The main advantage of trading using opposite LG Display and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Xiaomi | LG Display vs. Panasonic Corp |
| Major Drilling vs. Direct Line Insurance | Major Drilling vs. National Health Investors | Major Drilling vs. REVO INSURANCE SPA | Major Drilling vs. SBI Insurance Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| 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 | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |