Correlation Between IQuest and LB Investment
Can any of the company-specific risk be diversified away by investing in both IQuest and LB Investment 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 IQuest and LB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and LB Investment, you can compare the effects of market volatilities on IQuest and LB Investment 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 IQuest with a short position of LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and LB Investment.
Diversification Opportunities for IQuest and LB Investment
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IQuest and 309960 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment and IQuest 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 IQuest Co are associated (or correlated) with LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of IQuest i.e., IQuest and LB Investment go up and down completely randomly.
Pair Corralation between IQuest and LB Investment
Assuming the 90 days trading horizon IQuest Co is expected to generate 0.72 times more return on investment than LB Investment. However, IQuest Co is 1.38 times less risky than LB Investment. It trades about -0.02 of its potential returns per unit of risk. LB Investment is currently generating about -0.04 per unit of risk. If you would invest 343,669 in IQuest Co on September 4, 2024 and sell it today you would lose (101,169) from holding IQuest Co or give up 29.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.3% |
| Values | Daily Returns |
IQuest Co vs. LB Investment
Performance |
| Timeline |
| IQuest |
| LB Investment |
IQuest and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and LB Investment
The main advantage of trading using opposite IQuest and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| IQuest vs. LB Investment | IQuest vs. Lindeman Asia Investment | IQuest vs. DB Financial Investment | IQuest vs. Jinro Distillers Co |
| LB Investment vs. SKONEC Entertainment Co | LB Investment vs. DB Insurance Co | LB Investment vs. T3 Entertainment Co | LB Investment vs. YG Entertainment |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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