Correlation Between Utime and LG Display

Can any of the company-specific risk be diversified away by investing in both Utime 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 Utime and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Utime and LG Display Co, you can compare the effects of market volatilities on Utime 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 Utime with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utime and LG Display.

Diversification Opportunities for Utime and LG Display

-0.34

Correlation Coefficient

Utime  LG Display

Very good diversification

The 3 months correlation between Utime and LPL is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Utime and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Utime 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 Utime 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 Utime i.e., Utime and LG Display go up and down completely randomly.

Pair Corralation between Utime and LG Display

If you would invest  55.00  in Utime on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Utime or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Utime  vs.  LG Display Co

Utime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Utime is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LG Display

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LG Display Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Utime and LG Display

The main advantage of trading using opposite Utime and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utime 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.

The idea behind Utime and LG Display Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.