Correlation Between LG Display and Lendlease
Can any of the company-specific risk be diversified away by investing in both LG Display and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on LG Display and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Lendlease.
Diversification Opportunities for LG Display and Lendlease
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LGA and Lendlease is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of LG Display i.e., LG Display and Lendlease go up and down completely randomly.
Pair Corralation between LG Display and Lendlease
Assuming the 90 days horizon LG Display Co is expected to under-perform the Lendlease. In addition to that, LG Display is 1.12 times more volatile than Lendlease Group. It trades about -0.13 of its total potential returns per unit of risk. Lendlease Group is currently generating about -0.03 per unit of volatility. If you would invest 424.00 in Lendlease Group on September 12, 2024 and sell it today you would lose (15.00) from holding Lendlease Group or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Lendlease Group
Performance |
| Timeline |
| LG Display |
| Lendlease Group |
LG Display and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Lendlease
The main advantage of trading using opposite LG Display and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |