Correlation Between TRAVEL + and LG Display
Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and LG Display Co, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and LG Display.
Diversification Opportunities for TRAVEL + and LG Display
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRAVEL and LGA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and LG Display go up and down completely randomly.
Pair Corralation between TRAVEL + and LG Display
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.79 times more return on investment than LG Display. However, TRAVEL LEISURE DL 01 is 1.27 times less risky than LG Display. It trades about 0.13 of its potential returns per unit of risk. LG Display Co is currently generating about 0.02 per unit of risk. If you would invest 3,881 in TRAVEL LEISURE DL 01 on September 3, 2024 and sell it today you would earn a total of 1,369 from holding TRAVEL LEISURE DL 01 or generate 35.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. LG Display Co
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| LG Display |
TRAVEL + and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and LG Display
The main advantage of trading using opposite TRAVEL + and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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.| TRAVEL + vs. TRIPCOM GROUP DL 00125 | TRAVEL + vs. TUI AG | TRAVEL + vs. TripAdvisor | TRAVEL + vs. TRAINLINE PLC LS |
| LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co | LG Display vs. Xiaomi |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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