Correlation Between LG Display and Apple
Can any of the company-specific risk be diversified away by investing in both LG Display and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on LG Display and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Apple.
Diversification Opportunities for LG Display and Apple
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LPL and Apple is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of LG Display i.e., LG Display and Apple go up and down completely randomly.
Pair Corralation between LG Display and Apple
Considering the 90-day investment horizon LG Display Co is expected to under-perform the Apple. In addition to that, LG Display is 1.85 times more volatile than Apple Inc. It trades about -0.15 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.12 per unit of volatility. If you would invest 23,560 in Apple Inc on August 23, 2024 and sell it today you would lose (708.00) from holding Apple Inc or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Apple Inc
Performance |
| Timeline |
| LG Display |
| Apple Inc |
LG Display and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Apple
The main advantage of trading using opposite LG Display and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| LG Display vs. VOXX International | LG Display vs. Vizio Holding Corp | LG Display vs. Turtle Beach Corp | LG Display vs. Emerson Radio |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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