Correlation Between Lendlease and LG Display
Can any of the company-specific risk be diversified away by investing in both Lendlease and LG Display 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 Lendlease and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and LG Display Co, you can compare the effects of market volatilities on Lendlease and LG Display 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 Lendlease with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and LG Display.
Diversification Opportunities for Lendlease and LG Display
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lendlease and LGA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Lendlease 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 Lendlease Group are associated (or correlated) with LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Lendlease i.e., Lendlease and LG Display go up and down completely randomly.
Pair Corralation between Lendlease and LG Display
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.89 times more return on investment than LG Display. However, Lendlease Group is 1.12 times less risky than LG Display. It trades about -0.03 of its potential returns per unit of risk. LG Display Co is currently generating about -0.13 per unit of risk. If you would invest 424.00 in Lendlease Group on September 12, 2024 and sell it today you would lose (15.00) from holding Lendlease Group or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. LG Display Co
Performance |
| Timeline |
| Lendlease Group |
| LG Display |
Lendlease and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and LG Display
The main advantage of trading using opposite Lendlease and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.The idea behind Lendlease Group and LG Display Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |