Correlation Between LG Display and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both LG Display and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on LG Display and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and NAKED WINES.
Diversification Opportunities for LG Display and NAKED WINES
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between LGA and NAKED is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of LG Display i.e., LG Display and NAKED WINES go up and down completely randomly.
Pair Corralation between LG Display and NAKED WINES
Assuming the 90 days horizon LG Display Co is expected to generate 0.49 times more return on investment than NAKED WINES. However, LG Display Co is 2.04 times less risky than NAKED WINES. It trades about -0.11 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.18 per unit of risk. If you would invest 340.00 in LG Display Co on August 29, 2024 and sell it today you would lose (12.00) from holding LG Display Co or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LG Display Co vs. NAKED WINES PLC
Performance |
| Timeline |
| LG Display |
| NAKED WINES PLC |
LG Display and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and NAKED WINES
The main advantage of trading using opposite LG Display and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| LG Display vs. JAPAN TOBACCO UNSPADR12 | LG Display vs. Grupo Carso SAB | LG Display vs. XLMedia PLC | LG Display vs. Dave Busters Entertainment |
| NAKED WINES vs. Hawesko Holding AG | NAKED WINES vs. ANDREW PELLER LTD | NAKED WINES vs. CHINA TONTINE WINES |
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 CEOs Directory module to screen CEOs from public companies around the world.
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