Correlation Between LG Display and Knightscope

Can any of the company-specific risk be diversified away by investing in both LG Display and Knightscope 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 Knightscope 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 Knightscope, you can compare the effects of market volatilities on LG Display and Knightscope 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 Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Knightscope.

Diversification Opportunities for LG Display and Knightscope

-0.27

Correlation Coefficient

LG Display  Knightscope

Very good diversification

The 3 months correlation between LPL and Knightscope is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope 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 Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of LG Display i.e., LG Display and Knightscope go up and down completely randomly.

Pair Corralation between LG Display and Knightscope

Considering the 90-day investment horizon LG Display Co is expected to generate 0.36 times more return on investment than Knightscope. However, LG Display Co is 2.82 times less risky than Knightscope. It trades about 0.01 of its potential returns per unit of risk. Knightscope is currently generating about -0.28 per unit of risk. If you would invest  321.00  in LG Display Co on December 20, 2024 and sell it today you would earn a total of  0.00  from holding LG Display Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LG Display Co  vs.  Knightscope

LG Display

Risk-Adjusted Performance

Weak

Over the last 90 days LG Display Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, LG Display is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Knightscope

Risk-Adjusted Performance

Very Weak

Over the last 90 days Knightscope has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with LG Display and Knightscope

The main advantage of trading using opposite LG Display and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.

The idea behind LG Display Co and Knightscope pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.