Correlation Between Live Ventures and LG Display

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

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

Diversification Opportunities for Live Ventures and LG Display

-0.46

Correlation Coefficient

Live Ventures  LG Display

Very good diversification

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

Pair Corralation between Live Ventures and LG Display

Given the investment horizon of 90 days Live Ventures is expected to generate 1.26 times more return on investment than LG Display. However, Live Ventures is 1.26 times more volatile than LG Display Co. It trades about -0.01 of its potential returns per unit of risk. LG Display Co is currently generating about -0.03 per unit of risk. If you would invest  3,958  in Live Ventures on January 30, 2024 and sell it today you would lose (1,371) from holding Live Ventures or give up 34.64% of portfolio value over 90 days.

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

Live Ventures  vs.  LG Display Co

Live Ventures

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Live Ventures are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Live Ventures may actually be approaching a critical reversion point that can send shares even higher in May 2024.

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 weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Live Ventures and LG Display

The main advantage of trading using opposite Live Ventures and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures 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 Live Ventures 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.