Correlation Between LG Display and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both LG Display and SIDETRADE 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 SIDETRADE 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 SIDETRADE EO 1, you can compare the effects of market volatilities on LG Display and SIDETRADE 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 SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and SIDETRADE.
Diversification Opportunities for LG Display and SIDETRADE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGA and SIDETRADE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 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 SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of LG Display i.e., LG Display and SIDETRADE go up and down completely randomly.
Pair Corralation between LG Display and SIDETRADE
Assuming the 90 days horizon LG Display Co is expected to under-perform the SIDETRADE. In addition to that, LG Display is 1.23 times more volatile than SIDETRADE EO 1. It trades about -0.05 of its total potential returns per unit of risk. SIDETRADE EO 1 is currently generating about 0.07 per unit of volatility. If you would invest 13,100 in SIDETRADE EO 1 on September 19, 2024 and sell it today you would earn a total of 8,800 from holding SIDETRADE EO 1 or generate 67.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. SIDETRADE EO 1
Performance |
| Timeline |
| LG Display |
| SIDETRADE EO 1 |
LG Display and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and SIDETRADE
The main advantage of trading using opposite LG Display and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE's long position.| LG Display vs. Samsung Electronics Co | LG Display vs. Superior Plus Corp | LG Display vs. SIVERS SEMICONDUCTORS AB | LG Display vs. Norsk Hydro ASA |
| SIDETRADE vs. Tencent Music Entertainment | SIDETRADE vs. Take Two Interactive Software | SIDETRADE vs. Alfa Financial Software | SIDETRADE vs. LG Display Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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