Correlation Between Koss and LG Display
Can any of the company-specific risk be diversified away by investing in both Koss 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 Koss and LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koss Corporation and LG Display Co, you can compare the effects of market volatilities on Koss 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 Koss with a short position of LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koss and LG Display.
Diversification Opportunities for Koss and LG Display
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Koss and LPL is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display and Koss 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 Koss Corporation 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 Koss i.e., Koss and LG Display go up and down completely randomly.
Pair Corralation between Koss and LG Display
Given the investment horizon of 90 days Koss Corporation is expected to generate 0.82 times more return on investment than LG Display. However, Koss Corporation is 1.21 times less risky than LG Display. It trades about -0.14 of its potential returns per unit of risk. LG Display Co is currently generating about -0.16 per unit of risk. If you would invest 248.00 in Koss Corporation on January 20, 2024 and sell it today you would lose (14.00) from holding Koss Corporation or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koss Corp. vs. LG Display Co
Performance |
| Timeline |
| Koss |
| LG Display |
Koss and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koss and LG Display
The main advantage of trading using opposite Koss and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koss 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.| Koss vs. LG Display Co | Koss vs. The Singing Machine | Koss vs. Wearable Devices | Koss vs. Zepp Health Corp |
| LG Display vs. Maximus | LG Display vs. Network 1 Technologies | LG Display vs. First Advantage Corp | LG Display vs. BrightView Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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