Correlation Between LG Electronics and PLAYSTUDIOS
Can any of the company-specific risk be diversified away by investing in both LG Electronics and PLAYSTUDIOS 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 Electronics and PLAYSTUDIOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on LG Electronics and PLAYSTUDIOS 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 Electronics with a short position of PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and PLAYSTUDIOS.
Diversification Opportunities for LG Electronics and PLAYSTUDIOS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGLG and PLAYSTUDIOS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL and LG Electronics 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 Electronics are associated (or correlated) with PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of LG Electronics i.e., LG Electronics and PLAYSTUDIOS go up and down completely randomly.
Pair Corralation between LG Electronics and PLAYSTUDIOS
Assuming the 90 days trading horizon LG Electronics is expected to under-perform the PLAYSTUDIOS. But the stock apears to be less risky and, when comparing its historical volatility, LG Electronics is 2.36 times less risky than PLAYSTUDIOS. The stock trades about -0.03 of its potential returns per unit of risk. The PLAYSTUDIOS A DL 0001 is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 128.00 in PLAYSTUDIOS A DL 0001 on August 29, 2024 and sell it today you would earn a total of 47.00 from holding PLAYSTUDIOS A DL 0001 or generate 36.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Electronics vs. PLAYSTUDIOS A DL 0001
Performance |
| Timeline |
| LG Electronics |
| PLAYSTUDIOS A DL |
LG Electronics and PLAYSTUDIOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and PLAYSTUDIOS
The main advantage of trading using opposite LG Electronics and PLAYSTUDIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, PLAYSTUDIOS 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 PLAYSTUDIOS will offset losses from the drop in PLAYSTUDIOS's long position.| LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc |
| PLAYSTUDIOS vs. Apple Inc | PLAYSTUDIOS vs. Apple Inc | PLAYSTUDIOS vs. Apple Inc | PLAYSTUDIOS 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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