Correlation Between L3Harris Technologies and Apax Global
Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies and Apax Global 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 L3Harris Technologies and Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L3Harris Technologies and Apax Global Alpha, you can compare the effects of market volatilities on L3Harris Technologies and Apax Global 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 L3Harris Technologies with a short position of Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and Apax Global.
Diversification Opportunities for L3Harris Technologies and Apax Global
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between L3Harris and Apax is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha and L3Harris Technologies 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 L3Harris Technologies are associated (or correlated) with Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of L3Harris Technologies i.e., L3Harris Technologies and Apax Global go up and down completely randomly.
Pair Corralation between L3Harris Technologies and Apax Global
Assuming the 90 days trading horizon L3Harris Technologies is expected to generate 0.88 times more return on investment than Apax Global. However, L3Harris Technologies is 1.14 times less risky than Apax Global. It trades about 0.04 of its potential returns per unit of risk. Apax Global Alpha is currently generating about 0.0 per unit of risk. If you would invest 21,761 in L3Harris Technologies on September 13, 2024 and sell it today you would earn a total of 1,094 from holding L3Harris Technologies or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
L3Harris Technologies vs. Apax Global Alpha
Performance |
| Timeline |
| L3Harris Technologies |
| Apax Global Alpha |
L3Harris Technologies and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L3Harris Technologies and Apax Global
The main advantage of trading using opposite L3Harris Technologies and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.| L3Harris Technologies vs. Samsung Electronics Co | L3Harris Technologies vs. Samsung Electronics Co | L3Harris Technologies vs. Hyundai Motor | L3Harris Technologies vs. Reliance Industries Ltd |
| Apax Global vs. Catalyst Media Group | Apax Global vs. CATLIN GROUP | Apax Global vs. Tamburi Investment Partners | Apax Global vs. Magnora ASA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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