Correlation Between LG Display and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both LG Display and ZINC MEDIA 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 ZINC MEDIA 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 ZINC MEDIA GR, you can compare the effects of market volatilities on LG Display and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and ZINC MEDIA.
Diversification Opportunities for LG Display and ZINC MEDIA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LGA and ZINC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of LG Display i.e., LG Display and ZINC MEDIA go up and down completely randomly.
Pair Corralation between LG Display and ZINC MEDIA
Assuming the 90 days horizon LG Display Co is expected to generate 1.0 times more return on investment than ZINC MEDIA. However, LG Display Co is 1.0 times less risky than ZINC MEDIA. It trades about -0.02 of its potential returns per unit of risk. ZINC MEDIA GR is currently generating about -0.03 per unit of risk. If you would invest 458.00 in LG Display Co on September 20, 2024 and sell it today you would lose (160.00) from holding LG Display Co or give up 34.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. ZINC MEDIA GR
Performance |
| Timeline |
| LG Display |
| ZINC MEDIA GR |
LG Display and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and ZINC MEDIA
The main advantage of trading using opposite LG Display and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.| LG Display vs. Reinsurance Group of | LG Display vs. Singapore Reinsurance | LG Display vs. INSURANCE AUST GRP | LG Display vs. Ping An Insurance |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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