Correlation Between LG Display and Inzi Display
Can any of the company-specific risk be diversified away by investing in both LG Display and Inzi 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 LG Display and Inzi Display 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 Inzi Display CoLtd, you can compare the effects of market volatilities on LG Display and Inzi 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 LG Display with a short position of Inzi Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Inzi Display.
Diversification Opportunities for LG Display and Inzi Display
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 034220 and Inzi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Inzi Display CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inzi Display CoLtd 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 Inzi Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inzi Display CoLtd has no effect on the direction of LG Display i.e., LG Display and Inzi Display go up and down completely randomly.
Pair Corralation between LG Display and Inzi Display
Assuming the 90 days trading horizon LG Display Co is expected to generate 1.48 times more return on investment than Inzi Display. However, LG Display is 1.48 times more volatile than Inzi Display CoLtd. It trades about -0.14 of its potential returns per unit of risk. Inzi Display CoLtd is currently generating about -0.34 per unit of risk. If you would invest 1,094,000 in LG Display Co on August 31, 2024 and sell it today you would lose (101,000) from holding LG Display Co or give up 9.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
LG Display Co vs. Inzi Display CoLtd
Performance |
Timeline |
LG Display |
Inzi Display CoLtd |
LG Display and Inzi Display Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Display and Inzi Display
The main advantage of trading using opposite LG Display and Inzi Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Inzi 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 Inzi Display will offset losses from the drop in Inzi Display's long position.LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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