Correlation Between PULSION Medical and LG Display
Can any of the company-specific risk be diversified away by investing in both PULSION Medical 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 PULSION Medical and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and LG Display Co, you can compare the effects of market volatilities on PULSION Medical 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 PULSION Medical with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and LG Display.
Diversification Opportunities for PULSION Medical and LG Display
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PULSION and LGA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and PULSION Medical 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 PULSION Medical Systems 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 PULSION Medical i.e., PULSION Medical and LG Display go up and down completely randomly.
Pair Corralation between PULSION Medical and LG Display
Assuming the 90 days trading horizon PULSION Medical Systems is expected to generate 0.17 times more return on investment than LG Display. However, PULSION Medical Systems is 5.94 times less risky than LG Display. It trades about 0.22 of its potential returns per unit of risk. LG Display Co is currently generating about 0.01 per unit of risk. If you would invest 1,600 in PULSION Medical Systems on November 2, 2024 and sell it today you would earn a total of 20.00 from holding PULSION Medical Systems or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PULSION Medical Systems vs. LG Display Co
Performance |
| Timeline |
| PULSION Medical Systems |
| LG Display |
PULSION Medical and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and LG Display
The main advantage of trading using opposite PULSION Medical and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical 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.| PULSION Medical vs. Richardson Electronics | PULSION Medical vs. SPORTING | PULSION Medical vs. Fukuyama Transporting Co | PULSION Medical vs. ARROW ELECTRONICS |
| LG Display vs. WILLIS LEASE FIN | LG Display vs. ALBIS LEASING AG | LG Display vs. Air Lease | LG Display vs. Jacquet Metal Service |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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