Correlation Between EVI Industries and LGL
Can any of the company-specific risk be diversified away by investing in both EVI Industries and LGL 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 EVI Industries and LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVI Industries and LGL Group, you can compare the effects of market volatilities on EVI Industries and LGL 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 EVI Industries with a short position of LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVI Industries and LGL.
Diversification Opportunities for EVI Industries and LGL
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EVI and LGL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding EVI Industries and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and EVI Industries 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 EVI Industries are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of EVI Industries i.e., EVI Industries and LGL go up and down completely randomly.
Pair Corralation between EVI Industries and LGL
Considering the 90-day investment horizon EVI Industries is expected to generate 2.79 times less return on investment than LGL. In addition to that, EVI Industries is 1.29 times more volatile than LGL Group. It trades about 0.01 of its total potential returns per unit of risk. LGL Group is currently generating about 0.05 per unit of volatility. If you would invest 425.00 in LGL Group on November 1, 2024 and sell it today you would earn a total of 255.00 from holding LGL Group or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
EVI Industries vs. LGL Group
Performance |
| Timeline |
| EVI Industries |
| LGL Group |
EVI Industries and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVI Industries and LGL
The main advantage of trading using opposite EVI Industries and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVI Industries position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.| EVI Industries vs. DXP Enterprises | EVI Industries vs. Global Industrial Co | EVI Industries vs. Core Main | EVI Industries vs. Watsco Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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