Correlation Between Applied Blockchain and Lixil Group
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and Lixil Group 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 Applied Blockchain and Lixil Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and Lixil Group Corp, you can compare the effects of market volatilities on Applied Blockchain and Lixil Group 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 Applied Blockchain with a short position of Lixil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Lixil Group.
Diversification Opportunities for Applied Blockchain and Lixil Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Lixil is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Lixil Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixil Group Corp and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with Lixil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixil Group Corp has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Lixil Group go up and down completely randomly.
Pair Corralation between Applied Blockchain and Lixil Group
Given the investment horizon of 90 days Applied Blockchain is expected to generate 8.96 times more return on investment than Lixil Group. However, Applied Blockchain is 8.96 times more volatile than Lixil Group Corp. It trades about 0.18 of its potential returns per unit of risk. Lixil Group Corp is currently generating about -0.03 per unit of risk. If you would invest 365.00 in Applied Blockchain on August 30, 2024 and sell it today you would earn a total of 601.00 from holding Applied Blockchain or generate 164.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Blockchain vs. Lixil Group Corp
Performance |
| Timeline |
| Applied Blockchain |
| Lixil Group Corp |
Applied Blockchain and Lixil Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and Lixil Group
The main advantage of trading using opposite Applied Blockchain and Lixil Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, Lixil Group 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 Lixil Group will offset losses from the drop in Lixil Group's long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
| Lixil Group vs. Masco | Lixil Group vs. Carrier Global Corp | Lixil Group vs. Daikin IndustriesLtd | Lixil Group vs. Lennox International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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