Correlation Between LG Display and MPH Health
Can any of the company-specific risk be diversified away by investing in both LG Display and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on LG Display and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and MPH Health.
Diversification Opportunities for LG Display and MPH Health
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LGA and MPH is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of LG Display i.e., LG Display and MPH Health go up and down completely randomly.
Pair Corralation between LG Display and MPH Health
Assuming the 90 days horizon LG Display Co is expected to under-perform the MPH Health. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.3 times less risky than MPH Health. The stock trades about -0.04 of its potential returns per unit of risk. The MPH Health Care is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,980 in MPH Health Care on November 1, 2024 and sell it today you would earn a total of 360.00 from holding MPH Health Care or generate 18.18% 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. MPH Health Care
Performance |
| Timeline |
| LG Display |
| MPH Health Care |
LG Display and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and MPH Health
The main advantage of trading using opposite LG Display and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| LG Display vs. Yuexiu Transport Infrastructure | LG Display vs. GOLD ROAD RES | LG Display vs. BII Railway Transportation | LG Display vs. ALBIS LEASING AG |
| MPH Health vs. ANGANG STEEL H | MPH Health vs. Khiron Life Sciences | MPH Health vs. ULTRA CLEAN HLDGS | MPH Health vs. Coffee Holding 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |