Correlation Between LG Display and Playstudios

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Can any of the company-specific risk be diversified away by investing in both LG Display 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 Display and Playstudios 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 Playstudios, you can compare the effects of market volatilities on LG Display 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 Display with a short position of Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Playstudios.

Diversification Opportunities for LG Display and Playstudios

LPLPlaystudiosDiversified AwayLPLPlaystudiosDiversified Away100%
-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between LPL and Playstudios is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 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 has no effect on the direction of LG Display i.e., LG Display and Playstudios go up and down completely randomly.

Pair Corralation between LG Display and Playstudios

Considering the 90-day investment horizon LG Display Co is expected to generate 0.63 times more return on investment than Playstudios. However, LG Display Co is 1.59 times less risky than Playstudios. It trades about 0.09 of its potential returns per unit of risk. Playstudios is currently generating about -0.05 per unit of risk. If you would invest  308.00  in LG Display Co on December 4, 2024 and sell it today you would earn a total of  11.50  from holding LG Display Co or generate 3.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LG Display Co  vs.  Playstudios

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15LPL MYPS
       Timeline  
LG Display 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days LG Display Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, LG Display is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar3.053.13.153.23.253.33.353.43.453.5
Playstudios 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Playstudios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar1.51.61.71.81.922.12.2

LG Display and Playstudios Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.27-2.45-1.63-0.810.00.791.592.383.18 0.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15LPL MYPS
       Returns  

Pair Trading with LG Display and Playstudios

The main advantage of trading using opposite LG Display and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display 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' long position.
The idea behind LG Display Co and Playstudios 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.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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