Correlation Between LG Display and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both LG Display and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA, you can compare the effects of market volatilities on LG Display and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and ATRESMEDIA.
Diversification Opportunities for LG Display and ATRESMEDIA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LGA and ATRESMEDIA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of LG Display i.e., LG Display and ATRESMEDIA go up and down completely randomly.
Pair Corralation between LG Display and ATRESMEDIA
Assuming the 90 days horizon LG Display Co is expected to under-perform the ATRESMEDIA. In addition to that, LG Display is 1.97 times more volatile than ATRESMEDIA. It trades about -0.09 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about -0.02 per unit of volatility. If you would invest 455.00 in ATRESMEDIA on September 2, 2024 and sell it today you would lose (6.00) from holding ATRESMEDIA or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. ATRESMEDIA
Performance |
| Timeline |
| LG Display |
| ATRESMEDIA |
LG Display and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and ATRESMEDIA
The main advantage of trading using opposite LG Display and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| LG Display vs. Apple Inc | LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co |
| ATRESMEDIA vs. SIVERS SEMICONDUCTORS AB | ATRESMEDIA vs. Darden Restaurants | ATRESMEDIA vs. Reliance Steel Aluminum | ATRESMEDIA vs. Q2M Managementberatung AG |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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