Correlation Between Public Service and Light Science
Can any of the company-specific risk be diversified away by investing in both Public Service and Light Science 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 Public Service and Light Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Light Science Technologies, you can compare the effects of market volatilities on Public Service and Light Science 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 Public Service with a short position of Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Light Science.
Diversification Opportunities for Public Service and Light Science
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Public and Light is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno and Public Service 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 Public Service Enterprise are associated (or correlated) with Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Public Service i.e., Public Service and Light Science go up and down completely randomly.
Pair Corralation between Public Service and Light Science
Assuming the 90 days trading horizon Public Service is expected to generate 1.35 times less return on investment than Light Science. But when comparing it to its historical volatility, Public Service Enterprise is 5.34 times less risky than Light Science. It trades about 0.08 of its potential returns per unit of risk. Light Science Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 450.00 in Light Science Technologies on October 10, 2024 and sell it today you would lose (170.00) from holding Light Science Technologies or give up 37.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.26% |
| Values | Daily Returns |
Public Service Enterprise vs. Light Science Technologies
Performance |
| Timeline |
| Public Service Enterprise |
| Light Science Techno |
Public Service and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and Light Science
The main advantage of trading using opposite Public Service and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Public Service vs. Walmart | Public Service vs. BYD Co | Public Service vs. Volkswagen AG | Public Service vs. Volkswagen AG Non Vtg |
| Light Science vs. Zegona Communications Plc | Light Science vs. Naked Wines plc | Light Science vs. Infrastrutture Wireless Italiane | Light Science vs. Orient Telecoms |
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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