Correlation Between LG Display and Graphic Packaging | LGA.F vs. 4W8.F

Correlation Between LG Display and Graphic Packaging

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both LG Display and Graphic Packaging 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 Graphic Packaging 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 Graphic Packaging Holding, you can compare the effects of market volatilities on LG Display and Graphic Packaging 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 Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Graphic Packaging.

Diversification Opportunities for LG Display and Graphic Packaging

LGAGraphicDiversified AwayLGAGraphicDiversified Away100%
-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between LGA and Graphic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of LG Display i.e., LG Display and Graphic Packaging go up and down completely randomly.

Pair Corralation between LG Display and Graphic Packaging

Assuming the 90 days horizon LG Display Co is expected to under-perform the Graphic Packaging. In addition to that, LG Display is 1.54 times more volatile than Graphic Packaging Holding. It trades about -0.05 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.04 per unit of volatility. If you would invest  2,287  in Graphic Packaging Holding on September 14, 2024 and sell it today you would earn a total of  498.00  from holding Graphic Packaging Holding or generate 21.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

LG Display Co  vs.  Graphic Packaging Holding

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -50510
JavaScript chart by amCharts 3.21.15LGA 4W8
       Timeline  
LG Display 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LG Display Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec33.13.23.33.43.53.63.73.8
Graphic Packaging Holding 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Graphic Packaging Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Graphic Packaging is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec25.52626.52727.52828.529

LG Display and Graphic Packaging Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.88-2.16-1.44-0.710.00.651.31.942.59 0.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.15LGA 4W8
       Returns  

Pair Trading with LG Display and Graphic Packaging

The main advantage of trading using opposite LG Display and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.
The idea behind LG Display Co and Graphic Packaging Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Stocks Directory
Find actively traded stocks across global markets
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Technical Analysis
Check basic technical indicators and analysis based on most latest market data