Correlation Between Albion Venture and LG Longer
Can any of the company-specific risk be diversified away by investing in both Albion Venture and LG Longer 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 Albion Venture and LG Longer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Venture Capital and LG Longer Dated, you can compare the effects of market volatilities on Albion Venture and LG Longer 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 Albion Venture with a short position of LG Longer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Venture and LG Longer.
Diversification Opportunities for Albion Venture and LG Longer
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albion and COMF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Albion Venture Capital and LG Longer Dated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Longer Dated and Albion Venture 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 Albion Venture Capital are associated (or correlated) with LG Longer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Longer Dated has no effect on the direction of Albion Venture i.e., Albion Venture and LG Longer go up and down completely randomly.
Pair Corralation between Albion Venture and LG Longer
Assuming the 90 days trading horizon Albion Venture Capital is expected to under-perform the LG Longer. In addition to that, Albion Venture is 1.36 times more volatile than LG Longer Dated. It trades about -0.21 of its total potential returns per unit of risk. LG Longer Dated is currently generating about 0.02 per unit of volatility. If you would invest 2,261 in LG Longer Dated on September 2, 2024 and sell it today you would earn a total of 4.00 from holding LG Longer Dated or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Venture Capital vs. LG Longer Dated
Performance |
| Timeline |
| Albion Venture Capital |
| LG Longer Dated |
Albion Venture and LG Longer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Venture and LG Longer
The main advantage of trading using opposite Albion Venture and LG Longer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Venture position performs unexpectedly, LG Longer 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 LG Longer will offset losses from the drop in LG Longer's long position.| Albion Venture vs. iShares MSCI Japan | Albion Venture vs. Amundi EUR High | Albion Venture vs. iShares JP Morgan | Albion Venture vs. Xtrackers MSCI |
| LG Longer vs. iShares MSCI Japan | LG Longer vs. Amundi EUR High | LG Longer vs. iShares JP Morgan | LG Longer vs. Xtrackers MSCI |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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