Correlation Between LB Investment and Nable Communications
Can any of the company-specific risk be diversified away by investing in both LB Investment and Nable Communications 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 LB Investment and Nable Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Investment and Nable Communications, you can compare the effects of market volatilities on LB Investment and Nable Communications 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 LB Investment with a short position of Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Nable Communications.
Diversification Opportunities for LB Investment and Nable Communications
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 309960 and Nable is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications and LB Investment 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 LB Investment are associated (or correlated) with Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of LB Investment i.e., LB Investment and Nable Communications go up and down completely randomly.
Pair Corralation between LB Investment and Nable Communications
Assuming the 90 days trading horizon LB Investment is expected to under-perform the Nable Communications. In addition to that, LB Investment is 2.05 times more volatile than Nable Communications. It trades about -0.04 of its total potential returns per unit of risk. Nable Communications is currently generating about -0.01 per unit of volatility. If you would invest 760,000 in Nable Communications on August 30, 2024 and sell it today you would lose (119,000) from holding Nable Communications or give up 15.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.65% |
| Values | Daily Returns |
LB Investment vs. Nable Communications
Performance |
| Timeline |
| LB Investment |
| Nable Communications |
LB Investment and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Nable Communications
The main advantage of trading using opposite LB Investment and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
| Nable Communications vs. Samick Musical Instruments | Nable Communications vs. Vitzro Tech Co | Nable Communications vs. PNC Technologies co | Nable Communications vs. Yura Tech Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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