Correlation Between Caribbean Utilities and Lycos Energy
Can any of the company-specific risk be diversified away by investing in both Caribbean Utilities and Lycos Energy 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 Caribbean Utilities and Lycos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caribbean Utilities and Lycos Energy, you can compare the effects of market volatilities on Caribbean Utilities and Lycos Energy 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 Caribbean Utilities with a short position of Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribbean Utilities and Lycos Energy.
Diversification Opportunities for Caribbean Utilities and Lycos Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caribbean and Lycos is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Caribbean Utilities and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy and Caribbean Utilities 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 Caribbean Utilities are associated (or correlated) with Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Caribbean Utilities i.e., Caribbean Utilities and Lycos Energy go up and down completely randomly.
Pair Corralation between Caribbean Utilities and Lycos Energy
Assuming the 90 days trading horizon Caribbean Utilities is expected to generate 28.5 times less return on investment than Lycos Energy. But when comparing it to its historical volatility, Caribbean Utilities is 12.87 times less risky than Lycos Energy. It trades about 0.02 of its potential returns per unit of risk. Lycos Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 496.00 in Lycos Energy on September 5, 2024 and sell it today you would lose (217.00) from holding Lycos Energy or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.94% |
| Values | Daily Returns |
Caribbean Utilities vs. Lycos Energy
Performance |
| Timeline |
| Caribbean Utilities |
| Lycos Energy |
Caribbean Utilities and Lycos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caribbean Utilities and Lycos Energy
The main advantage of trading using opposite Caribbean Utilities and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caribbean Utilities position performs unexpectedly, Lycos Energy 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 Lycos Energy will offset losses from the drop in Lycos Energy's long position.| Caribbean Utilities vs. Maxim Power Corp | Caribbean Utilities vs. ATCO | Caribbean Utilities vs. Capstone Infrastructure Corp | Caribbean Utilities vs. Richards Packaging Income |
| Lycos Energy vs. Profound Medical Corp | Lycos Energy vs. Brookfield Office Properties | Lycos Energy vs. Marimaca Copper Corp | Lycos Energy vs. QC Copper and |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |