Correlation Between Iron Mountain and LBG Media
Can any of the company-specific risk be diversified away by investing in both Iron Mountain and LBG Media 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 Iron Mountain and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain and LBG Media PLC, you can compare the effects of market volatilities on Iron Mountain and LBG Media 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 Iron Mountain with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and LBG Media.
Diversification Opportunities for Iron Mountain and LBG Media
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iron and LBG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Iron Mountain 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 Iron Mountain are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Iron Mountain i.e., Iron Mountain and LBG Media go up and down completely randomly.
Pair Corralation between Iron Mountain and LBG Media
Assuming the 90 days trading horizon Iron Mountain is expected to generate 0.65 times more return on investment than LBG Media. However, Iron Mountain is 1.54 times less risky than LBG Media. It trades about 0.09 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.02 per unit of risk. If you would invest 4,891 in Iron Mountain on December 1, 2024 and sell it today you would earn a total of 4,478 from holding Iron Mountain or generate 91.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.99% |
| Values | Daily Returns |
Iron Mountain vs. LBG Media PLC
Performance |
| Timeline |
| Iron Mountain |
| LBG Media PLC |
Iron Mountain and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and LBG Media
The main advantage of trading using opposite Iron Mountain and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Iron Mountain vs. Austevoll Seafood ASA | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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