Correlation Between LG Display and Griffon
Can any of the company-specific risk be diversified away by investing in both LG Display and Griffon 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 Griffon 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 Griffon, you can compare the effects of market volatilities on LG Display and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Griffon.
Diversification Opportunities for LG Display and Griffon
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LPL and Griffon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of LG Display i.e., LG Display and Griffon go up and down completely randomly.
Pair Corralation between LG Display and Griffon
Considering the 90-day investment horizon LG Display Co is expected to generate 1.19 times more return on investment than Griffon. However, LG Display is 1.19 times more volatile than Griffon. It trades about 0.05 of its potential returns per unit of risk. Griffon is currently generating about -0.14 per unit of risk. If you would invest 319.00 in LG Display Co on October 17, 2024 and sell it today you would earn a total of 6.00 from holding LG Display Co or generate 1.88% 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. Griffon
Performance |
| Timeline |
| LG Display |
| Griffon |
LG Display and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Griffon
The main advantage of trading using opposite LG Display and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| LG Display vs. VOXX International | LG Display vs. Emerson Radio | LG Display vs. Universal Electronics | LG Display vs. Sonos Inc |
| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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