Correlation Between Leroy Seafood and Made Tech
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Made Tech 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 Leroy Seafood and Made Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Made Tech Group, you can compare the effects of market volatilities on Leroy Seafood and Made Tech 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 Leroy Seafood with a short position of Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Made Tech.
Diversification Opportunities for Leroy Seafood and Made Tech
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leroy and Made is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Made Tech go up and down completely randomly.
Pair Corralation between Leroy Seafood and Made Tech
Assuming the 90 days trading horizon Leroy Seafood is expected to generate 3.4 times less return on investment than Made Tech. But when comparing it to its historical volatility, Leroy Seafood Group is 2.1 times less risky than Made Tech. It trades about 0.06 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Made Tech Group on August 31, 2024 and sell it today you would earn a total of 700.00 from holding Made Tech Group or generate 43.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. Made Tech Group
Performance |
| Timeline |
| Leroy Seafood Group |
| Made Tech Group |
Leroy Seafood and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Made Tech
The main advantage of trading using opposite Leroy Seafood and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Leroy Seafood vs. Neometals | Leroy Seafood vs. Coor Service Management | Leroy Seafood vs. Aeorema Communications Plc | Leroy Seafood vs. JLEN Environmental Assets |
| Made Tech vs. Liontrust Asset Management | Made Tech vs. National Bank of | Made Tech vs. InterContinental Hotels Group | Made Tech vs. Synchrony Financial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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