Correlation Between LG Display and Data IO
Can any of the company-specific risk be diversified away by investing in both LG Display and Data IO 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 Data IO 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 Data IO, you can compare the effects of market volatilities on LG Display and Data IO 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 Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Data IO.
Diversification Opportunities for LG Display and Data IO
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LPL and Data is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO 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 Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of LG Display i.e., LG Display and Data IO go up and down completely randomly.
Pair Corralation between LG Display and Data IO
Considering the 90-day investment horizon LG Display Co is expected to under-perform the Data IO. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 1.21 times less risky than Data IO. The stock trades about -0.12 of its potential returns per unit of risk. The Data IO is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 275.00 in Data IO on October 24, 2024 and sell it today you would earn a total of 18.00 from holding Data IO or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Data IO
Performance |
| Timeline |
| LG Display |
| Data IO |
LG Display and Data IO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Data IO
The main advantage of trading using opposite LG Display and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Data IO 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 Data IO will offset losses from the drop in Data IO's long position.| LG Display vs. VOXX International | LG Display vs. Emerson Radio | LG Display vs. Universal Electronics | LG Display vs. Sonos 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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