Correlation Between Carlson Investments and LSI Software
Can any of the company-specific risk be diversified away by investing in both Carlson Investments and LSI Software 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 Carlson Investments and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlson Investments SA and LSI Software SA, you can compare the effects of market volatilities on Carlson Investments and LSI Software 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 Carlson Investments with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and LSI Software.
Diversification Opportunities for Carlson Investments and LSI Software
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlson and LSI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of Carlson Investments i.e., Carlson Investments and LSI Software go up and down completely randomly.
Pair Corralation between Carlson Investments and LSI Software
Assuming the 90 days trading horizon Carlson Investments SA is expected to generate 3.41 times more return on investment than LSI Software. However, Carlson Investments is 3.41 times more volatile than LSI Software SA. It trades about 0.11 of its potential returns per unit of risk. LSI Software SA is currently generating about -0.06 per unit of risk. If you would invest 419.00 in Carlson Investments SA on August 27, 2024 and sell it today you would earn a total of 38.00 from holding Carlson Investments SA or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Carlson Investments SA vs. LSI Software SA
Performance |
| Timeline |
| Carlson Investments |
| LSI Software SA |
Carlson Investments and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlson Investments and LSI Software
The main advantage of trading using opposite Carlson Investments and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlson Investments position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.| Carlson Investments vs. Movie Games SA | Carlson Investments vs. Gaming Factory SA | Carlson Investments vs. Creotech Instruments SA | Carlson Investments vs. Pyramid Games SA |
| LSI Software vs. SOFTWARE MANSION SPOLKA | LSI Software vs. Echo Investment SA | LSI Software vs. Carlson Investments SA | LSI Software vs. Quantum Software SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |