Correlation Between MOWI ASA and LG Display
Can any of the company-specific risk be diversified away by investing in both MOWI ASA 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 MOWI ASA and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOWI ASA SPADR and LG Display Co, you can compare the effects of market volatilities on MOWI ASA 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 MOWI ASA with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOWI ASA and LG Display.
Diversification Opportunities for MOWI ASA and LG Display
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MOWI and LGA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MOWI ASA SPADR and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and MOWI ASA 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 MOWI ASA SPADR 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 MOWI ASA i.e., MOWI ASA and LG Display go up and down completely randomly.
Pair Corralation between MOWI ASA and LG Display
Assuming the 90 days trading horizon MOWI ASA SPADR is expected to generate 0.63 times more return on investment than LG Display. However, MOWI ASA SPADR is 1.6 times less risky than LG Display. It trades about 0.23 of its potential returns per unit of risk. LG Display Co is currently generating about -0.2 per unit of risk. If you would invest 1,617 in MOWI ASA SPADR on September 13, 2024 and sell it today you would earn a total of 73.00 from holding MOWI ASA SPADR or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOWI ASA SPADR vs. LG Display Co
Performance |
| Timeline |
| MOWI ASA SPADR |
| LG Display |
MOWI ASA and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOWI ASA and LG Display
The main advantage of trading using opposite MOWI ASA and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOWI ASA 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.| MOWI ASA vs. Zijin Mining Group | MOWI ASA vs. Jacquet Metal Service | MOWI ASA vs. GRIFFIN MINING LTD | MOWI ASA vs. LEGACY IRON ORE |
| LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Sony Group | LG Display vs. Superior Plus Corp |
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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