Correlation Between LG Display and Playstudios
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
-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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Playstudios
Performance |
| Timeline |
| LG Display |
| Playstudios |
LG Display and Playstudios Volatility Contrast
Predicted Return Density |
| 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.| LG Display vs. VOXX International | ||
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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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