Correlation Between LG Display and H M
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By analyzing existing cross correlation between LG Display Co and H M Hennes, you can compare the effects of market volatilities on LG Display and H M 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 LG Display with a short position of H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and H M.
Diversification Opportunities for LG Display and H M
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between LGA and HMSB is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and LG Display 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 LG Display Co are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of LG Display i.e., LG Display and H M go up and down completely randomly.
Pair Corralation between LG Display and H M
Assuming the 90 days horizon LG Display Co is expected to generate 1.26 times more return on investment than H M. However, LG Display is 1.26 times more volatile than H M Hennes. It trades about -0.02 of its potential returns per unit of risk. H M Hennes is currently generating about -0.07 per unit of risk. If you would invest 314.00 in LG Display Co on December 4, 2024 and sell it today you would lose (14.00) from holding LG Display Co or give up 4.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.92% |
Values | Daily Returns |
LG Display Co vs. H M Hennes
Performance |
Timeline |
LG Display |
H M Hennes |
LG Display and H M Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Display and H M
The main advantage of trading using opposite LG Display and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, H M 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 H M will offset losses from the drop in H M's long position.LG Display vs. Singapore Telecommunications Limited | LG Display vs. INDO RAMA SYNTHETIC | LG Display vs. Ribbon Communications | LG Display vs. China BlueChemical |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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