Correlation Between INFORMATION SVC and LG Display
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC 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 INFORMATION SVC and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and LG Display Co, you can compare the effects of market volatilities on INFORMATION SVC 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 INFORMATION SVC with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and LG Display.
Diversification Opportunities for INFORMATION SVC and LG Display
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INFORMATION and LGA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and INFORMATION SVC 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 INFORMATION SVC GRP 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 INFORMATION SVC i.e., INFORMATION SVC and LG Display go up and down completely randomly.
Pair Corralation between INFORMATION SVC and LG Display
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 2.03 times more return on investment than LG Display. However, INFORMATION SVC is 2.03 times more volatile than LG Display Co. It trades about 0.39 of its potential returns per unit of risk. LG Display Co is currently generating about -0.13 per unit of risk. If you would invest 284.00 in INFORMATION SVC GRP on September 1, 2024 and sell it today you would earn a total of 62.00 from holding INFORMATION SVC GRP or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. LG Display Co
Performance |
| Timeline |
| INFORMATION SVC GRP |
| LG Display |
INFORMATION SVC and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and LG Display
The main advantage of trading using opposite INFORMATION SVC and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC 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.| INFORMATION SVC vs. Alfa Financial Software | INFORMATION SVC vs. Meli Hotels International | INFORMATION SVC vs. MIRAMAR HOTEL INV | INFORMATION SVC vs. Hyatt Hotels |
| LG Display vs. Apple Inc | LG Display vs. Apple Inc | LG Display vs. Samsung Electronics Co | LG Display vs. Samsung Electronics Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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