Correlation Between LG Display and CNOOC
Can any of the company-specific risk be diversified away by investing in both LG Display and CNOOC 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 CNOOC 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 CNOOC, you can compare the effects of market volatilities on LG Display and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and CNOOC.
Diversification Opportunities for LG Display and CNOOC
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LGA and CNOOC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and CNOOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC has no effect on the direction of LG Display i.e., LG Display and CNOOC go up and down completely randomly.
Pair Corralation between LG Display and CNOOC
If you would invest 218.00 in CNOOC on October 20, 2024 and sell it today you would earn a total of 0.00 from holding CNOOC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
LG Display Co vs. CNOOC
Performance |
| Timeline |
| LG Display |
| CNOOC |
LG Display and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and CNOOC
The main advantage of trading using opposite LG Display and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| LG Display vs. Semiconductor Manufacturing International | LG Display vs. ON SEMICONDUCTOR | LG Display vs. PULSION Medical Systems | LG Display vs. CVR Medical Corp |
| CNOOC vs. Alibaba Group Holding | CNOOC vs. ConocoPhillips | CNOOC vs. EOG Resources | CNOOC vs. Occidental Petroleum |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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