Correlation Between LG Display and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both LG Display and Mitsubishi UFJ 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 Mitsubishi UFJ 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 Mitsubishi UFJ Financial, you can compare the effects of market volatilities on LG Display and Mitsubishi UFJ 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 Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Mitsubishi UFJ.
Diversification Opportunities for LG Display and Mitsubishi UFJ
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGA and Mitsubishi is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Mitsubishi UFJ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Financial 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 Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Financial has no effect on the direction of LG Display i.e., LG Display and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between LG Display and Mitsubishi UFJ
Assuming the 90 days horizon LG Display Co is expected to under-perform the Mitsubishi UFJ. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.18 times less risky than Mitsubishi UFJ. The stock trades about -0.2 of its potential returns per unit of risk. The Mitsubishi UFJ Financial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,070 in Mitsubishi UFJ Financial on September 14, 2024 and sell it today you would earn a total of 70.00 from holding Mitsubishi UFJ Financial or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| LG Display |
| Mitsubishi UFJ Financial |
LG Display and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Mitsubishi UFJ
The main advantage of trading using opposite LG Display and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp | LG Display vs. SIVERS SEMICONDUCTORS AB |
| Mitsubishi UFJ vs. USWE SPORTS AB | Mitsubishi UFJ vs. SIEM OFFSHORE NEW | Mitsubishi UFJ vs. Aegean Airlines SA | Mitsubishi UFJ vs. LG Display 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |