Correlation Between LG Display and Intel

Can any of the company-specific risk be diversified away by investing in both LG Display and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on LG Display and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Display and Intel.

Diversification Opportunities for LG Display and Intel

0.51

Correlation Coefficient

LG Display  Intel

Very weak diversification

The 3 months correlation between LPL and Intel is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding LG Display Co and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of LG Display i.e., LG Display and Intel go up and down completely randomly.

Pair Corralation between LG Display and Intel

Considering the 90-day investment horizon LG Display Co is expected to generate 0.79 times more return on investment than Intel. However, LG Display Co is 1.27 times less risky than Intel. It trades about 0.22 of its potential returns per unit of risk. Intel is currently generating about 0.02 per unit of risk. If you would invest  295.00  in LG Display Co on May 1, 2025 and sell it today you would earn a total of  98.00  from holding LG Display Co or generate 33.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

LG Display Co  vs.  Intel

LG Display

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LG Display Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, LG Display disclosed solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LG Display and Intel

The main advantage of trading using opposite LG Display and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Display position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.

The idea behind LG Display Co and Intel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.