Correlation Between LG Display and Aeroports
Can any of the company-specific risk be diversified away by investing in both LG Display and Aeroports 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 LG Display and Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display Co and Aeroports de Paris, you can compare the effects of market volatilities on LG Display and Aeroports 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 Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Aeroports.
Diversification Opportunities for LG Display and Aeroports
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGA and Aeroports is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris 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 Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of LG Display i.e., LG Display and Aeroports go up and down completely randomly.
Pair Corralation between LG Display and Aeroports
Assuming the 90 days horizon LG Display Co is expected to generate 1.64 times more return on investment than Aeroports. However, LG Display is 1.64 times more volatile than Aeroports de Paris. It trades about -0.02 of its potential returns per unit of risk. Aeroports de Paris is currently generating about -0.1 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 | 100.0% |
Values | Daily Returns |
LG Display Co vs. Aeroports de Paris
Performance |
Timeline |
LG Display |
Aeroports de Paris |
LG Display and Aeroports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Display and Aeroports
The main advantage of trading using opposite LG Display and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.LG Display vs. Singapore Telecommunications Limited | LG Display vs. INDO RAMA SYNTHETIC | LG Display vs. Ribbon Communications | LG Display vs. China BlueChemical |
Aeroports vs. FUYO GENERAL LEASE | Aeroports vs. UNITED RENTALS | Aeroports vs. Easy Software AG | Aeroports vs. BioNTech SE |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |