Correlation Between INTER CARS and LG Display

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

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

Diversification Opportunities for INTER CARS and LG Display

0.31

Correlation Coefficient

INTER CARS  LG Display

Weak diversification

The 3 months correlation between INTER and LGA is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and LG Display go up and down completely randomly.

Pair Corralation between INTER CARS and LG Display

Assuming the 90 days horizon INTER CARS is expected to generate 1.96 times less return on investment than LG Display. In addition to that, INTER CARS is 1.03 times more volatile than LG Display Co. It trades about 0.08 of its total potential returns per unit of risk. LG Display Co is currently generating about 0.15 per unit of volatility. If you would invest  238.00  in LG Display Co on April 20, 2025 and sell it today you would earn a total of  50.00  from holding LG Display Co or generate 21.01% return on investment over 90 days.

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

INTER CARS SA  vs.  LG Display Co

INTER CARS SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTER CARS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

LG Display

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LG Display Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, LG Display reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTER CARS and LG Display

The main advantage of trading using opposite INTER CARS and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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 INTER CARS SA 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.