Correlation Between Guitammer and LG Display

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

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

Diversification Opportunities for Guitammer and LG Display

0.0

Correlation Coefficient

Guitammer  LG Display

Pay attention - limited upside

The 3 months correlation between Guitammer and LPL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Guitammer and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Guitammer 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 The Guitammer 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 Guitammer i.e., Guitammer and LG Display go up and down completely randomly.

Pair Corralation between Guitammer and LG Display

If you would invest (100.00) in The Guitammer on February 1, 2024 and sell it today you would earn a total of  100.00  from holding The Guitammer or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Guitammer  vs.  LG Display Co

Guitammer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Guitammer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Guitammer is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 Guitammer and LG Display

The main advantage of trading using opposite Guitammer and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guitammer 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 The Guitammer 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.