Correlation Between LG Display and Bank of New York Mellon
Can any of the company-specific risk be diversified away by investing in both LG Display and Bank of New York Mellon 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 Bank of New York Mellon 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 The Bank of, you can compare the effects of market volatilities on LG Display and Bank of New York Mellon 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 Bank of New York Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Bank of New York Mellon.
Diversification Opportunities for LG Display and Bank of New York Mellon
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGA and Bank is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York Mellon 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 Bank of New York Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York Mellon has no effect on the direction of LG Display i.e., LG Display and Bank of New York Mellon go up and down completely randomly.
Pair Corralation between LG Display and Bank of New York Mellon
Assuming the 90 days horizon LG Display Co is expected to under-perform the Bank of New York Mellon. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.21 times less risky than Bank of New York Mellon. The stock trades about -0.19 of its potential returns per unit of risk. The The Bank of is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 6,942 in The Bank of on September 5, 2024 and sell it today you would earn a total of 847.00 from holding The Bank of or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LG Display Co vs. The Bank of
Performance |
| Timeline |
| LG Display |
| Bank of New York Mellon |
LG Display and Bank of New York Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Bank of New York Mellon
The main advantage of trading using opposite LG Display and Bank of New York Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Bank of New York Mellon 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 Bank of New York Mellon will offset losses from the drop in Bank of New York Mellon's long position.| LG Display vs. Sumitomo Rubber Industries | LG Display vs. Materialise NV | LG Display vs. ADRIATIC METALS LS 013355 | LG Display vs. British American Tobacco |
| Bank of New York Mellon vs. LG Display Co | Bank of New York Mellon vs. USWE SPORTS AB | Bank of New York Mellon vs. International Consolidated Airlines | Bank of New York Mellon vs. ePlay Digital |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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