Correlation Between GoPro and LG Display
Can any of the company-specific risk be diversified away by investing in both GoPro 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 GoPro and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and LG Display Co, you can compare the effects of market volatilities on GoPro 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 GoPro with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and LG Display.
Diversification Opportunities for GoPro and LG Display
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GoPro and LPL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and GoPro 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 GoPro Inc 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 GoPro i.e., GoPro and LG Display go up and down completely randomly.
Pair Corralation between GoPro and LG Display
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the LG Display. But the stock apears to be less risky and, when comparing its historical volatility, GoPro Inc is 1.14 times less risky than LG Display. The stock trades about -0.73 of its potential returns per unit of risk. The LG Display Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 410.00 in LG Display Co on January 24, 2024 and sell it today you would lose (16.00) from holding LG Display Co or give up 3.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
GoPro Inc vs. LG Display Co
Performance |
Timeline |
GoPro Inc |
LG Display |
GoPro and LG Display Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GoPro and LG Display
The main advantage of trading using opposite GoPro and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro 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.GoPro vs. Brunswick | GoPro vs. Ralph Lauren Corp | GoPro vs. Under Armour C | GoPro vs. Dogness International Corp |
LG Display vs. VOXX International | LG Display vs. Vizio Holding Corp | LG Display vs. Turtle Beach Corp | LG Display vs. Emerson Radio |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Transaction History View history of all your transactions and understand their impact on performance | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |