Correlation Between LG Display and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both LG Display and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy Corp, you can compare the effects of market volatilities on LG Display and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Hemisphere Energy.
Diversification Opportunities for LG Display and Hemisphere Energy
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGA and Hemisphere is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of LG Display i.e., LG Display and Hemisphere Energy go up and down completely randomly.
Pair Corralation between LG Display and Hemisphere Energy
Assuming the 90 days horizon LG Display Co is expected to under-perform the Hemisphere Energy. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.36 times less risky than Hemisphere Energy. The stock trades about -0.16 of its potential returns per unit of risk. The Hemisphere Energy Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 122.00 in Hemisphere Energy Corp on August 25, 2024 and sell it today you would lose (1.00) from holding Hemisphere Energy Corp or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Hemisphere Energy Corp
Performance |
| Timeline |
| LG Display |
| Hemisphere Energy Corp |
LG Display and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Hemisphere Energy
The main advantage of trading using opposite LG Display and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy'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 |
| Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy 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 CEOs Directory module to screen CEOs from public companies around the world.
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