Correlation Between LG Display and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both LG Display and HEALTHCARE REAL 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 HEALTHCARE REAL 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 HEALTHCARE REAL A, you can compare the effects of market volatilities on LG Display and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and HEALTHCARE REAL.
Diversification Opportunities for LG Display and HEALTHCARE REAL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LGA and HEALTHCARE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of LG Display i.e., LG Display and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between LG Display and HEALTHCARE REAL
Assuming the 90 days horizon LG Display Co is expected to under-perform the HEALTHCARE REAL. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.18 times less risky than HEALTHCARE REAL. The stock trades about -0.22 of its potential returns per unit of risk. The HEALTHCARE REAL A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,648 in HEALTHCARE REAL A on August 24, 2024 and sell it today you would earn a total of 2.00 from holding HEALTHCARE REAL A or generate 0.12% 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. HEALTHCARE REAL A
Performance |
| Timeline |
| LG Display |
| HEALTHCARE REAL A |
LG Display and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and HEALTHCARE REAL
The main advantage of trading using opposite LG Display and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL's long position.| LG Display vs. AIR PRODCHEMICALS | LG Display vs. Sekisui Chemical Co | LG Display vs. Mitsubishi Gas Chemical | LG Display vs. JAPAN TOBACCO UNSPADR12 |
| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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