Correlation Between Economic Investment and Life Banc
Can any of the company-specific risk be diversified away by investing in both Economic Investment and Life Banc 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 Economic Investment and Life Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Life Banc Split, you can compare the effects of market volatilities on Economic Investment and Life Banc 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 Economic Investment with a short position of Life Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Life Banc.
Diversification Opportunities for Economic Investment and Life Banc
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Economic and Life is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust and Life Banc Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Banc Split and Economic 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 Economic Investment Trust are associated (or correlated) with Life Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Banc Split has no effect on the direction of Economic Investment i.e., Economic Investment and Life Banc go up and down completely randomly.
Pair Corralation between Economic Investment and Life Banc
Assuming the 90 days trading horizon Economic Investment is expected to generate 6.64 times less return on investment than Life Banc. But when comparing it to its historical volatility, Economic Investment Trust is 1.64 times less risky than Life Banc. It trades about 0.17 of its potential returns per unit of risk. Life Banc Split is currently generating about 0.7 of returns per unit of risk over similar time horizon. If you would invest 839.00 in Life Banc Split on September 4, 2024 and sell it today you would earn a total of 113.00 from holding Life Banc Split or generate 13.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Life Banc Split
Performance |
| Timeline |
| Economic Investment Trust |
| Life Banc Split |
Economic Investment and Life Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Life Banc
The main advantage of trading using opposite Economic Investment and Life Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment position performs unexpectedly, Life Banc 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 Life Banc will offset losses from the drop in Life Banc's long position.| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
| Life Banc vs. iShares Canadian HYBrid | Life Banc vs. Altagas Cum Red | Life Banc vs. European Residential Real | Life Banc vs. iShares Fundamental Hedged |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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