Correlation Between Allied Motion and LSI Industries
Can any of the company-specific risk be diversified away by investing in both Allied Motion and LSI Industries 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 Allied Motion and LSI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and LSI Industries, you can compare the effects of market volatilities on Allied Motion and LSI Industries 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 Allied Motion with a short position of LSI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and LSI Industries.
Diversification Opportunities for Allied Motion and LSI Industries
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allied and LSI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and LSI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Industries and Allied Motion 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 Allied Motion Technologies are associated (or correlated) with LSI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Industries has no effect on the direction of Allied Motion i.e., Allied Motion and LSI Industries go up and down completely randomly.
Pair Corralation between Allied Motion and LSI Industries
If you would invest 1,619 in LSI Industries on August 24, 2024 and sell it today you would earn a total of 404.00 from holding LSI Industries or generate 24.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Allied Motion Technologies vs. LSI Industries
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LSI Industries |
Allied Motion and LSI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and LSI Industries
The main advantage of trading using opposite Allied Motion and LSI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion position performs unexpectedly, LSI Industries 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 LSI Industries will offset losses from the drop in LSI Industries' long position.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
| LSI Industries vs. Plexus Corp | LSI Industries vs. OSI Systems | LSI Industries vs. CTS Corporation | LSI Industries vs. Benchmark Electronics |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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