Correlation Between LIG-ES SPAC and Coloray International
Can any of the company-specific risk be diversified away by investing in both LIG-ES SPAC and Coloray International 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 LIG-ES SPAC and Coloray International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIG ES SPAC and Coloray International Investment, you can compare the effects of market volatilities on LIG-ES SPAC and Coloray International 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 LIG-ES SPAC with a short position of Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIG-ES SPAC and Coloray International.
Diversification Opportunities for LIG-ES SPAC and Coloray International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIG-ES and Coloray is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding LIG ES SPAC and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International and LIG-ES SPAC 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 LIG ES SPAC are associated (or correlated) with Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of LIG-ES SPAC i.e., LIG-ES SPAC and Coloray International go up and down completely randomly.
Pair Corralation between LIG-ES SPAC and Coloray International
Assuming the 90 days trading horizon LIG ES SPAC is expected to under-perform the Coloray International. In addition to that, LIG-ES SPAC is 1.36 times more volatile than Coloray International Investment. It trades about -0.1 of its total potential returns per unit of risk. Coloray International Investment is currently generating about -0.07 per unit of volatility. If you would invest 88,254 in Coloray International Investment on September 14, 2024 and sell it today you would lose (31,654) from holding Coloray International Investment or give up 35.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIG ES SPAC vs. Coloray International Investme
Performance |
| Timeline |
| LIG ES SPAC |
| Coloray International |
LIG-ES SPAC and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIG-ES SPAC and Coloray International
The main advantage of trading using opposite LIG-ES SPAC and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIG-ES SPAC position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| LIG-ES SPAC vs. Hyundai Green Food | LIG-ES SPAC vs. Samlip General Foods | LIG-ES SPAC vs. Stic Investments | LIG-ES SPAC vs. Samyang Foods Co |
| Coloray International vs. LG Chem | Coloray International vs. Chunbo Co | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. LIG ES SPAC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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