Correlation Between LIFENET INSURANCE and Lexington Realty
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Lexington Realty 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 LIFENET INSURANCE and Lexington Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Lexington Realty Trust, you can compare the effects of market volatilities on LIFENET INSURANCE and Lexington Realty 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 LIFENET INSURANCE with a short position of Lexington Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Lexington Realty.
Diversification Opportunities for LIFENET INSURANCE and Lexington Realty
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFENET and Lexington is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Lexington Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexington Realty Trust and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Lexington Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexington Realty Trust has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Lexington Realty go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Lexington Realty
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 0.83 times more return on investment than Lexington Realty. However, LIFENET INSURANCE CO is 1.2 times less risky than Lexington Realty. It trades about 0.12 of its potential returns per unit of risk. Lexington Realty Trust is currently generating about 0.06 per unit of risk. If you would invest 1,170 in LIFENET INSURANCE CO on September 4, 2024 and sell it today you would earn a total of 60.00 from holding LIFENET INSURANCE CO or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Lexington Realty Trust
Performance |
| Timeline |
| LIFENET INSURANCE |
| Lexington Realty Trust |
LIFENET INSURANCE and Lexington Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Lexington Realty
The main advantage of trading using opposite LIFENET INSURANCE and Lexington Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Lexington Realty 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 Lexington Realty will offset losses from the drop in Lexington Realty's long position.| LIFENET INSURANCE vs. Prudential plc | LIFENET INSURANCE vs. Wstenrot Wrttembergische AG | LIFENET INSURANCE vs. Gold Road Resources | LIFENET INSURANCE vs. Sumitomo Mitsui Construction |
| Lexington Realty vs. SLR Investment Corp | Lexington Realty vs. Virtus Investment Partners | Lexington Realty vs. Gladstone Investment | Lexington Realty vs. PennantPark Investment |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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