Correlation Between HEMISPHERE EGY and LG Display
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and LG Display 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 HEMISPHERE EGY and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and LG Display Co, you can compare the effects of market volatilities on HEMISPHERE EGY and LG Display 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 HEMISPHERE EGY with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and LG Display.
Diversification Opportunities for HEMISPHERE EGY and LG Display
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between HEMISPHERE and LGA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and HEMISPHERE EGY 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 HEMISPHERE EGY are associated (or correlated) with LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and LG Display go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and LG Display
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 0.98 times more return on investment than LG Display. However, HEMISPHERE EGY is 1.02 times less risky than LG Display. It trades about 0.04 of its potential returns per unit of risk. LG Display Co is currently generating about -0.08 per unit of risk. If you would invest 120.00 in HEMISPHERE EGY on August 30, 2024 and sell it today you would earn a total of 4.00 from holding HEMISPHERE EGY or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEMISPHERE EGY vs. LG Display Co
Performance |
| Timeline |
| HEMISPHERE EGY |
| LG Display |
HEMISPHERE EGY and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and LG Display
The main advantage of trading using opposite HEMISPHERE EGY and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| HEMISPHERE EGY vs. PRECISION DRILLING P | HEMISPHERE EGY vs. SEI INVESTMENTS | HEMISPHERE EGY vs. MSAD INSURANCE | HEMISPHERE EGY vs. PennyMac Mortgage Investment |
| LG Display vs. SK TELECOM TDADR | LG Display vs. Rogers Communications | LG Display vs. Entravision Communications | LG Display vs. Singapore Telecommunications Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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