Correlation Between Barco NV and LGL
Can any of the company-specific risk be diversified away by investing in both Barco NV and LGL 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 Barco NV and LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV ADR and LGL Group, you can compare the effects of market volatilities on Barco NV and LGL 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 Barco NV with a short position of LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and LGL.
Diversification Opportunities for Barco NV and LGL
Pay attention - limited upside
The 3 months correlation between Barco and LGL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV ADR and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and Barco NV 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 Barco NV ADR are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Barco NV i.e., Barco NV and LGL go up and down completely randomly.
Pair Corralation between Barco NV and LGL
If you would invest 580.00 in LGL Group on August 31, 2024 and sell it today you would earn a total of 5.00 from holding LGL Group or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV ADR vs. LGL Group
Performance |
| Timeline |
| Barco NV ADR |
| LGL Group |
Barco NV and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and LGL
The main advantage of trading using opposite Barco NV and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.The idea behind Barco NV ADR and LGL Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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