Correlation Between Ecclesiastical Insurance and LBG Media
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance and LBG Media 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 Ecclesiastical Insurance and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and LBG Media PLC, you can compare the effects of market volatilities on Ecclesiastical Insurance and LBG Media 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 Ecclesiastical Insurance with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and LBG Media.
Diversification Opportunities for Ecclesiastical Insurance and LBG Media
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ecclesiastical and LBG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and LBG Media go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and LBG Media
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.68 times more return on investment than LBG Media. However, Ecclesiastical Insurance Office is 1.48 times less risky than LBG Media. It trades about -0.02 of its potential returns per unit of risk. LBG Media PLC is currently generating about -0.11 per unit of risk. If you would invest 13,500 in Ecclesiastical Insurance Office on September 3, 2024 and sell it today you would lose (100.00) from holding Ecclesiastical Insurance Office or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. LBG Media PLC
Performance |
| Timeline |
| Ecclesiastical Insurance |
| LBG Media PLC |
Ecclesiastical Insurance and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and LBG Media
The main advantage of trading using opposite Ecclesiastical Insurance and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Ecclesiastical Insurance vs. LBG Media PLC | Ecclesiastical Insurance vs. LPKF Laser Electronics | Ecclesiastical Insurance vs. One Media iP | Ecclesiastical Insurance vs. Grand Vision Media |
| LBG Media vs. Intuitive Investments Group | LBG Media vs. European Metals Holdings | LBG Media vs. Athelney Trust plc | LBG Media vs. Invesco Health Care |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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