Correlation Between Flameret and Lsb Industries
Can any of the company-specific risk be diversified away by investing in both Flameret and Lsb Industries 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 Flameret and Lsb Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flameret and Lsb Industries, you can compare the effects of market volatilities on Flameret and Lsb Industries 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 Flameret with a short position of Lsb Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flameret and Lsb Industries.
Diversification Opportunities for Flameret and Lsb Industries
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flameret and Lsb is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Flameret and Lsb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsb Industries and Flameret 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 Flameret are associated (or correlated) with Lsb Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsb Industries has no effect on the direction of Flameret i.e., Flameret and Lsb Industries go up and down completely randomly.
Pair Corralation between Flameret and Lsb Industries
Given the investment horizon of 90 days Flameret is expected to under-perform the Lsb Industries. In addition to that, Flameret is 4.51 times more volatile than Lsb Industries. It trades about -0.09 of its total potential returns per unit of risk. Lsb Industries is currently generating about 0.0 per unit of volatility. If you would invest 878.00 in Lsb Industries on August 29, 2024 and sell it today you would lose (5.00) from holding Lsb Industries or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flameret vs. Lsb Industries
Performance |
| Timeline |
| Flameret |
| Lsb Industries |
Flameret and Lsb Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flameret and Lsb Industries
The main advantage of trading using opposite Flameret and Lsb Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flameret position performs unexpectedly, Lsb Industries 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 Lsb Industries will offset losses from the drop in Lsb Industries' long position.| Flameret vs. Origin Materials | Flameret vs. BASF SE NA | Flameret vs. Braskem SA Class | Flameret vs. Lsb Industries |
| Lsb Industries vs. Green Plains Renewable | Lsb Industries vs. AdvanSix | Lsb Industries vs. Tronox Holdings PLC | Lsb Industries vs. Methanex |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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