Correlation Between MOVIE GAMES and LKQ
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and LKQ 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 MOVIE GAMES and LKQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and LKQ Corporation, you can compare the effects of market volatilities on MOVIE GAMES and LKQ 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 MOVIE GAMES with a short position of LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and LKQ.
Diversification Opportunities for MOVIE GAMES and LKQ
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between MOVIE and LKQ is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and LKQ go up and down completely randomly.
Pair Corralation between MOVIE GAMES and LKQ
Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 2.31 times more return on investment than LKQ. However, MOVIE GAMES is 2.31 times more volatile than LKQ Corporation. It trades about 0.02 of its potential returns per unit of risk. LKQ Corporation is currently generating about -0.03 per unit of risk. If you would invest 438.00 in MOVIE GAMES SA on November 5, 2024 and sell it today you would lose (24.00) from holding MOVIE GAMES SA or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. LKQ Corp.
Performance |
| Timeline |
| MOVIE GAMES SA |
| LKQ Corporation |
MOVIE GAMES and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and LKQ
The main advantage of trading using opposite MOVIE GAMES and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ's long position.| MOVIE GAMES vs. PARKEN Sport Entertainment | MOVIE GAMES vs. CENTURIA OFFICE REIT | MOVIE GAMES vs. SIEM OFFSHORE NEW | MOVIE GAMES vs. GREENX METALS LTD |
| LKQ vs. Siemens Healthineers AG | LKQ vs. TOREX SEMICONDUCTOR LTD | LKQ vs. Cardinal Health | LKQ vs. Taiwan Semiconductor Manufacturing |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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