Correlation Between Ascot Resources and Leons Furniture
Can any of the company-specific risk be diversified away by investing in both Ascot Resources and Leons Furniture 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 Ascot Resources and Leons Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascot Resources and Leons Furniture Limited, you can compare the effects of market volatilities on Ascot Resources and Leons Furniture 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 Ascot Resources with a short position of Leons Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascot Resources and Leons Furniture.
Diversification Opportunities for Ascot Resources and Leons Furniture
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ascot and Leons is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ascot Resources and Leons Furniture Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leons Furniture and Ascot Resources 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 Ascot Resources are associated (or correlated) with Leons Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leons Furniture has no effect on the direction of Ascot Resources i.e., Ascot Resources and Leons Furniture go up and down completely randomly.
Pair Corralation between Ascot Resources and Leons Furniture
Assuming the 90 days trading horizon Ascot Resources is expected to under-perform the Leons Furniture. In addition to that, Ascot Resources is 3.26 times more volatile than Leons Furniture Limited. It trades about -0.01 of its total potential returns per unit of risk. Leons Furniture Limited is currently generating about 0.07 per unit of volatility. If you would invest 1,779 in Leons Furniture Limited on September 12, 2024 and sell it today you would earn a total of 881.00 from holding Leons Furniture Limited or generate 49.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascot Resources vs. Leons Furniture Limited
Performance |
| Timeline |
| Ascot Resources |
| Leons Furniture |
Ascot Resources and Leons Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascot Resources and Leons Furniture
The main advantage of trading using opposite Ascot Resources and Leons Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascot Resources position performs unexpectedly, Leons Furniture 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 Leons Furniture will offset losses from the drop in Leons Furniture's long position.| Ascot Resources vs. Ressources Minieres Radisson | Ascot Resources vs. Galantas Gold Corp | Ascot Resources vs. Red Pine Exploration | Ascot Resources vs. Kore Mining |
| Leons Furniture vs. Apple Inc CDR | Leons Furniture vs. NVIDIA CDR | Leons Furniture vs. Microsoft Corp CDR | Leons Furniture vs. Amazon CDR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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