Correlation Between LG Display and Sportsmans Warehouse
Can any of the company-specific risk be diversified away by investing in both LG Display and Sportsmans Warehouse 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 Sportsmans Warehouse 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 Sportsmans Warehouse Holdings, you can compare the effects of market volatilities on LG Display and Sportsmans Warehouse 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 Sportsmans Warehouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Sportsmans Warehouse.
Diversification Opportunities for LG Display and Sportsmans Warehouse
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGA and Sportsmans is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Sportsmans Warehouse Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans Warehouse 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 Sportsmans Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsmans Warehouse has no effect on the direction of LG Display i.e., LG Display and Sportsmans Warehouse go up and down completely randomly.
Pair Corralation between LG Display and Sportsmans Warehouse
Assuming the 90 days horizon LG Display Co is expected to under-perform the Sportsmans Warehouse. But the stock apears to be less risky and, when comparing its historical volatility, LG Display Co is 2.4 times less risky than Sportsmans Warehouse. The stock trades about -0.53 of its potential returns per unit of risk. The Sportsmans Warehouse Holdings is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Sportsmans Warehouse Holdings on March 7, 2024 and sell it today you would earn a total of 76.00 from holding Sportsmans Warehouse Holdings or generate 25.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
LG Display Co vs. Sportsmans Warehouse Holdings
Performance |
Timeline |
LG Display |
Sportsmans Warehouse |
LG Display and Sportsmans Warehouse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Display and Sportsmans Warehouse
The main advantage of trading using opposite LG Display and Sportsmans Warehouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Sportsmans Warehouse 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 Sportsmans Warehouse will offset losses from the drop in Sportsmans Warehouse's long position.LG Display vs. Xiaomi | LG Display vs. CITIUS RESOURCES LS 005 | LG Display vs. NMI Holdings | LG Display vs. SIVERS SEMICONDUCTORS AB |
Sportsmans Warehouse vs. Royal Caribbean Group | Sportsmans Warehouse vs. CITIUS RESOURCES LS 005 | Sportsmans Warehouse vs. NMI Holdings | Sportsmans Warehouse vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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