Correlation Between Beeks Trading and LBG Media
Can any of the company-specific risk be diversified away by investing in both Beeks Trading 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 Beeks Trading and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and LBG Media PLC, you can compare the effects of market volatilities on Beeks Trading 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 Beeks Trading with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and LBG Media.
Diversification Opportunities for Beeks Trading and LBG Media
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beeks and LBG is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading 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 Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and LBG Media go up and down completely randomly.
Pair Corralation between Beeks Trading and LBG Media
Assuming the 90 days trading horizon Beeks Trading is expected to under-perform the LBG Media. But the stock apears to be less risky and, when comparing its historical volatility, Beeks Trading is 1.15 times less risky than LBG Media. The stock trades about -0.17 of its potential returns per unit of risk. The LBG Media PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 11,800 in LBG Media PLC on October 11, 2024 and sell it today you would earn a total of 1,200 from holding LBG Media PLC or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beeks Trading vs. LBG Media PLC
Performance |
| Timeline |
| Beeks Trading |
| LBG Media PLC |
Beeks Trading and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and LBG Media
The main advantage of trading using opposite Beeks Trading and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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.| Beeks Trading vs. Charter Communications Cl | Beeks Trading vs. Zoom Video Communications | Beeks Trading vs. Creo Medical Group | Beeks Trading vs. Tata Steel Limited |
| LBG Media vs. Rheinmetall AG | LBG Media vs. BE Semiconductor Industries | LBG Media vs. EVS Broadcast Equipment | LBG Media vs. Golden Metal Resources |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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