Correlation Between FORMPIPE SOFTWARE and LG Electronics
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE and LG Electronics 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 FORMPIPE SOFTWARE and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and LG Electronics, you can compare the effects of market volatilities on FORMPIPE SOFTWARE and LG Electronics 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 FORMPIPE SOFTWARE with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and LG Electronics.
Diversification Opportunities for FORMPIPE SOFTWARE and LG Electronics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FORMPIPE and LGLG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and LG Electronics go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and LG Electronics
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 1.25 times more return on investment than LG Electronics. However, FORMPIPE SOFTWARE is 1.25 times more volatile than LG Electronics. It trades about 0.06 of its potential returns per unit of risk. LG Electronics is currently generating about -0.08 per unit of risk. If you would invest 183.00 in FORMPIPE SOFTWARE AB on October 25, 2024 and sell it today you would earn a total of 18.00 from holding FORMPIPE SOFTWARE AB or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. LG Electronics
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| LG Electronics |
FORMPIPE SOFTWARE and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and LG Electronics
The main advantage of trading using opposite FORMPIPE SOFTWARE and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| FORMPIPE SOFTWARE vs. Salesforce | FORMPIPE SOFTWARE vs. Uber Technologies | FORMPIPE SOFTWARE vs. PagerDuty | FORMPIPE SOFTWARE vs. Rocket Internet SE |
| LG Electronics vs. TROPHY GAMES DEV | LG Electronics vs. Scientific Games | LG Electronics vs. Gaming and Leisure | LG Electronics vs. MOVIE GAMES SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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