Correlation Between 1StdibsCom and Linkage Global
Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and Linkage Global 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 1StdibsCom and Linkage Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1StdibsCom and Linkage Global Ordinary, you can compare the effects of market volatilities on 1StdibsCom and Linkage Global 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 1StdibsCom with a short position of Linkage Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and Linkage Global.
Diversification Opportunities for 1StdibsCom and Linkage Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1StdibsCom and Linkage is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and Linkage Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linkage Global Ordinary and 1StdibsCom 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 1StdibsCom are associated (or correlated) with Linkage Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linkage Global Ordinary has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and Linkage Global go up and down completely randomly.
Pair Corralation between 1StdibsCom and Linkage Global
Given the investment horizon of 90 days 1StdibsCom is expected to generate 0.27 times more return on investment than Linkage Global. However, 1StdibsCom is 3.68 times less risky than Linkage Global. It trades about -0.04 of its potential returns per unit of risk. Linkage Global Ordinary is currently generating about -0.06 per unit of risk. If you would invest 515.00 in 1StdibsCom on August 27, 2024 and sell it today you would lose (130.00) from holding 1StdibsCom or give up 25.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1StdibsCom vs. Linkage Global Ordinary
Performance |
| Timeline |
| 1StdibsCom |
| Linkage Global Ordinary |
1StdibsCom and Linkage Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1StdibsCom and Linkage Global
The main advantage of trading using opposite 1StdibsCom and Linkage Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, Linkage Global 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 Linkage Global will offset losses from the drop in Linkage Global's long position.| 1StdibsCom vs. Sea | 1StdibsCom vs. Wayfair | 1StdibsCom vs. Chewy Inc | 1StdibsCom vs. Vipshop Holdings Limited |
| Linkage Global vs. Sea | Linkage Global vs. Wayfair | Linkage Global vs. Chewy Inc | Linkage Global vs. Vipshop Holdings Limited |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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