Correlation Between LG Display and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both LG Display and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on LG Display and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and CHEMICAL INDUSTRIES.
Diversification Opportunities for LG Display and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGA and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of LG Display i.e., LG Display and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between LG Display and CHEMICAL INDUSTRIES
If you would invest 298.00 in LG Display Co on October 12, 2024 and sell it today you would earn a total of 14.00 from holding LG Display Co or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| LG Display |
| CHEMICAL INDUSTRIES |
LG Display and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and CHEMICAL INDUSTRIES
The main advantage of trading using opposite LG Display and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.| LG Display vs. Zoom Video Communications | LG Display vs. DETALION GAMES SA | LG Display vs. GAMESTOP | LG Display vs. Penn National Gaming |
| CHEMICAL INDUSTRIES vs. NTT DATA | CHEMICAL INDUSTRIES vs. Synchrony Financial | CHEMICAL INDUSTRIES vs. INFORMATION SVC GRP | CHEMICAL INDUSTRIES vs. Webster Financial |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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