Correlation Between Hamilton Beach and LG Display
Can any of the company-specific risk be diversified away by investing in both Hamilton Beach 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 Hamilton Beach and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Beach Brands and LG Display Co, you can compare the effects of market volatilities on Hamilton Beach 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 Hamilton Beach with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and LG Display.
Diversification Opportunities for Hamilton Beach and LG Display
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hamilton and LPL is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Hamilton Beach 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 Hamilton Beach Brands 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 Hamilton Beach i.e., Hamilton Beach and LG Display go up and down completely randomly.
Pair Corralation between Hamilton Beach and LG Display
Considering the 90-day investment horizon Hamilton Beach Brands is expected to under-perform the LG Display. In addition to that, Hamilton Beach is 1.64 times more volatile than LG Display Co. It trades about -0.05 of its total potential returns per unit of risk. LG Display Co is currently generating about -0.08 per unit of volatility. If you would invest 415.00 in LG Display Co on January 26, 2024 and sell it today you would lose (19.00) from holding LG Display Co or give up 4.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hamilton Beach Brands vs. LG Display Co
Performance |
Timeline |
Hamilton Beach Brands |
LG Display |
Hamilton Beach and LG Display Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hamilton Beach and LG Display
The main advantage of trading using opposite Hamilton Beach and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach 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.Hamilton Beach vs. Tempur Sealy International | Hamilton Beach vs. La Z Boy Incorporated | Hamilton Beach vs. MasterBrand | Hamilton Beach vs. Ethan Allen Interiors |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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