Correlation Between LG Display and Turtle Beach
Can any of the company-specific risk be diversified away by investing in both LG Display and Turtle Beach 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 LG Display and Turtle Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Display Co and Turtle Beach Corp, you can compare the effects of market volatilities on LG Display and Turtle Beach 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 LG Display with a short position of Turtle Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Turtle Beach.
Diversification Opportunities for LG Display and Turtle Beach
0.78 | Correlation Coefficient |
Poor diversification
The 1 month correlation between LPL and Turtle is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp and LG Display 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 LG Display Co are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of LG Display i.e., LG Display and Turtle Beach go up and down completely randomly.
Pair Corralation between LG Display and Turtle Beach
Considering the 90-day investment horizon LG Display Co is expected to generate 1.27 times more return on investment than Turtle Beach. However, LG Display is 1.27 times more volatile than Turtle Beach Corp. It trades about -0.16 of its potential returns per unit of risk. Turtle Beach Corp is currently generating about -0.38 per unit of risk. If you would invest 417.00 in LG Display Co on January 20, 2024 and sell it today you would lose (32.00) from holding LG Display Co or give up 7.67% of portfolio value over 90 days.
| Time Period | 1 Month [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Display Co vs. Turtle Beach Corp
Performance |
| Timeline |
| LG Display |
| Turtle Beach Corp |
LG Display and Turtle Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Display and Turtle Beach
The main advantage of trading using opposite LG Display and Turtle Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Turtle Beach 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 Turtle Beach will offset losses from the drop in Turtle Beach's long position.| LG Display vs. Maximus | LG Display vs. Network 1 Technologies | LG Display vs. First Advantage Corp | LG Display vs. BrightView Holdings |
| Turtle Beach vs. LG Display Co | Turtle Beach vs. The Singing Machine | Turtle Beach vs. Wearable Devices | Turtle Beach vs. Zepp Health Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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