Correlation Between FLOW TRADERS and LG Display
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and LG Display Co, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and LG Display.
Diversification Opportunities for FLOW TRADERS and LG Display
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FLOW and LGA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and LG Display go up and down completely randomly.
Pair Corralation between FLOW TRADERS and LG Display
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.83 times more return on investment than LG Display. However, FLOW TRADERS LTD is 1.2 times less risky than LG Display. It trades about 0.1 of its potential returns per unit of risk. LG Display Co is currently generating about -0.05 per unit of risk. If you would invest 2,102 in FLOW TRADERS LTD on August 29, 2024 and sell it today you would earn a total of 54.00 from holding FLOW TRADERS LTD or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. LG Display Co
Performance |
| Timeline |
| FLOW TRADERS LTD |
| LG Display |
FLOW TRADERS and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and LG Display
The main advantage of trading using opposite FLOW TRADERS and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Macquarie Group Limited | FLOW TRADERS vs. MSCI Inc | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
| LG Display vs. DXC Technology Co | LG Display vs. Vishay Intertechnology | LG Display vs. SOUTHWEST AIRLINES | LG Display vs. Cars Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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