Correlation Between Arcontech Group and LBG Media
Can any of the company-specific risk be diversified away by investing in both Arcontech Group and LBG Media 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 Arcontech Group and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcontech Group Plc and LBG Media PLC, you can compare the effects of market volatilities on Arcontech Group and LBG Media 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 Arcontech Group with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcontech Group and LBG Media.
Diversification Opportunities for Arcontech Group and LBG Media
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arcontech and LBG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Arcontech Group Plc and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Arcontech Group 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 Arcontech Group Plc are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Arcontech Group i.e., Arcontech Group and LBG Media go up and down completely randomly.
Pair Corralation between Arcontech Group and LBG Media
Assuming the 90 days trading horizon Arcontech Group Plc is expected to generate 0.63 times more return on investment than LBG Media. However, Arcontech Group Plc is 1.6 times less risky than LBG Media. It trades about -0.33 of its potential returns per unit of risk. LBG Media PLC is currently generating about -0.22 per unit of risk. If you would invest 12,100 in Arcontech Group Plc on November 2, 2024 and sell it today you would lose (950.00) from holding Arcontech Group Plc or give up 7.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arcontech Group Plc vs. LBG Media PLC
Performance |
| Timeline |
| Arcontech Group Plc |
| LBG Media PLC |
Arcontech Group and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcontech Group and LBG Media
The main advantage of trading using opposite Arcontech Group and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcontech Group position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Arcontech Group vs. China Pacific Insurance | Arcontech Group vs. Cairo Communication SpA | Arcontech Group vs. Spirent Communications plc | Arcontech Group vs. Verizon Communications |
| LBG Media vs. European Metals Holdings | LBG Media vs. FC Investment Trust | LBG Media vs. Europa Metals | LBG Media vs. Diversified Energy |
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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |