Correlation Between Bankers Investment and Light Science
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Light Science 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 Bankers Investment and Light Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Light Science Technologies, you can compare the effects of market volatilities on Bankers Investment and Light Science 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 Bankers Investment with a short position of Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Light Science.
Diversification Opportunities for Bankers Investment and Light Science
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bankers and Light is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Bankers Investment i.e., Bankers Investment and Light Science go up and down completely randomly.
Pair Corralation between Bankers Investment and Light Science
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.33 times more return on investment than Light Science. However, Bankers Investment Trust is 3.06 times less risky than Light Science. It trades about 0.4 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.26 per unit of risk. If you would invest 11,400 in Bankers Investment Trust on October 23, 2024 and sell it today you would earn a total of 820.00 from holding Bankers Investment Trust or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bankers Investment Trust vs. Light Science Technologies
Performance |
| Timeline |
| Bankers Investment Trust |
| Light Science Techno |
Bankers Investment and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Light Science
The main advantage of trading using opposite Bankers Investment and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
| Light Science vs. Costco Wholesale Corp | Light Science vs. Moneta Money Bank | Light Science vs. Manulife Financial Corp | Light Science vs. Bankers Investment Trust |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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