Correlation Between LG Display and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both LG Display and Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical, you can compare the effects of market volatilities on LG Display and Park Electrochemical 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 Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Park Electrochemical.
Diversification Opportunities for LG Display and Park Electrochemical
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPL and Park is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of LG Display i.e., LG Display and Park Electrochemical go up and down completely randomly.
Pair Corralation between LG Display and Park Electrochemical
Considering the 90-day investment horizon LG Display Co is expected to generate 1.28 times more return on investment than Park Electrochemical. However, LG Display is 1.28 times more volatile than Park Electrochemical. It trades about 0.05 of its potential returns per unit of risk. Park Electrochemical is currently generating about -0.16 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Park Electrochemical
Performance |
| Timeline |
| LG Display |
| Park Electrochemical |
LG Display and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Park Electrochemical
The main advantage of trading using opposite LG Display and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| LG Display vs. VOXX International | LG Display vs. Emerson Radio | LG Display vs. Universal Electronics | LG Display vs. Sonos Inc |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |