Correlation Between LG Display and Graphic Packaging
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LG Display Co vs. Graphic Packaging Holding
Performance |
Timeline |
LG Display |
Graphic Packaging Holding |
LG Display and Graphic Packaging Volatility Contrast
Predicted Return Density |
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.LG Display vs. Samsung Electronics Co | ||
LG Display vs. Sony Group | ||
LG Display vs. Superior Plus Corp | ||
LG Display vs. SIVERS SEMICONDUCTORS AB |
Graphic Packaging vs. DALATA HOTEL | ||
Graphic Packaging vs. HYATT HOTELS A | ||
Graphic Packaging vs. Carsales | ||
Graphic Packaging vs. Choice Hotels International |
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 |