Correlation Between Clime Investment and L1 Long
Can any of the company-specific risk be diversified away by investing in both Clime Investment and L1 Long 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 Clime Investment and L1 Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and L1 Long Short, you can compare the effects of market volatilities on Clime Investment and L1 Long 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 Clime Investment with a short position of L1 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and L1 Long.
Diversification Opportunities for Clime Investment and L1 Long
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clime and LSF is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and L1 Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L1 Long Short and Clime 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 Clime Investment Management are associated (or correlated) with L1 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L1 Long Short has no effect on the direction of Clime Investment i.e., Clime Investment and L1 Long go up and down completely randomly.
Pair Corralation between Clime Investment and L1 Long
Assuming the 90 days trading horizon Clime Investment Management is expected to under-perform the L1 Long. In addition to that, Clime Investment is 1.92 times more volatile than L1 Long Short. It trades about -0.02 of its total potential returns per unit of risk. L1 Long Short is currently generating about 0.02 per unit of volatility. If you would invest 263.00 in L1 Long Short on October 27, 2024 and sell it today you would earn a total of 24.00 from holding L1 Long Short or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clime Investment Management vs. L1 Long Short
Performance |
| Timeline |
| Clime Investment Man |
| L1 Long Short |
Clime Investment and L1 Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clime Investment and L1 Long
The main advantage of trading using opposite Clime Investment and L1 Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment position performs unexpectedly, L1 Long 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 L1 Long will offset losses from the drop in L1 Long's long position.| Clime Investment vs. Pinnacle Investment Management | Clime Investment vs. EROAD | Clime Investment vs. Iron Road | Clime Investment vs. FireFly Metals |
| L1 Long vs. MFF Capital Investments | L1 Long vs. Ainsworth Game Technology | L1 Long vs. Carlton Investments | L1 Long vs. Red Hill Iron |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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