Correlation Between LG Display and Clearside Biomedical
Can any of the company-specific risk be diversified away by investing in both LG Display and Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical, you can compare the effects of market volatilities on LG Display and Clearside Biomedical 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 Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Clearside Biomedical.
Diversification Opportunities for LG Display and Clearside Biomedical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LGA and Clearside is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Clearside Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearside Biomedical 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 Clearside Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearside Biomedical has no effect on the direction of LG Display i.e., LG Display and Clearside Biomedical go up and down completely randomly.
Pair Corralation between LG Display and Clearside Biomedical
Assuming the 90 days horizon LG Display Co is expected to generate 0.73 times more return on investment than Clearside Biomedical. However, LG Display Co is 1.38 times less risky than Clearside Biomedical. It trades about -0.26 of its potential returns per unit of risk. Clearside Biomedical is currently generating about -0.37 per unit of risk. If you would invest 328.00 in LG Display Co on September 25, 2024 and sell it today you would lose (26.00) from holding LG Display Co or give up 7.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Clearside Biomedical
Performance |
| Timeline |
| LG Display |
| Clearside Biomedical |
LG Display and Clearside Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Clearside Biomedical
The main advantage of trading using opposite LG Display and Clearside Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Clearside Biomedical 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 Clearside Biomedical will offset losses from the drop in Clearside Biomedical's long position.| LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group |
| Clearside Biomedical vs. LG Display Co | Clearside Biomedical vs. Performance Food Group | Clearside Biomedical vs. CN MODERN DAIRY | Clearside Biomedical vs. VIAPLAY GROUP AB |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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