Correlation Between Calibre Mining and LG Display

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

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

Diversification Opportunities for Calibre Mining and LG Display

0.46

Correlation Coefficient

Calibre Mining  LG Display

Very weak diversification

The 3 months correlation between Calibre and LGA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Calibre Mining 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 Calibre Mining Corp 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 Calibre Mining i.e., Calibre Mining and LG Display go up and down completely randomly.

Pair Corralation between Calibre Mining and LG Display

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.34 times more return on investment than LG Display. However, Calibre Mining is 1.34 times more volatile than LG Display Co. It trades about 0.08 of its potential returns per unit of risk. LG Display Co is currently generating about -0.06 per unit of risk. If you would invest  149.00  in Calibre Mining Corp on September 3, 2024 and sell it today you would earn a total of  19.00  from holding Calibre Mining Corp or generate 12.75% return on investment over 90 days.

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

Calibre Mining Corp  vs.  LG Display Co

Calibre Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Calibre Mining and LG Display

The main advantage of trading using opposite Calibre Mining and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining 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 Calibre Mining Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.