Correlation Between Freight Technologies and LYFT
Can any of the company-specific risk be diversified away by investing in both Freight Technologies and LYFT 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 Freight Technologies and LYFT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freight Technologies and LYFT Inc, you can compare the effects of market volatilities on Freight Technologies and LYFT 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 Freight Technologies with a short position of LYFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freight Technologies and LYFT.
Diversification Opportunities for Freight Technologies and LYFT
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freight and LYFT is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Freight Technologies and LYFT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYFT Inc and Freight Technologies 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 Freight Technologies are associated (or correlated) with LYFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYFT Inc has no effect on the direction of Freight Technologies i.e., Freight Technologies and LYFT go up and down completely randomly.
Pair Corralation between Freight Technologies and LYFT
Given the investment horizon of 90 days Freight Technologies is expected to under-perform the LYFT. In addition to that, Freight Technologies is 2.02 times more volatile than LYFT Inc. It trades about -0.1 of its total potential returns per unit of risk. LYFT Inc is currently generating about 0.04 per unit of volatility. If you would invest 1,160 in LYFT Inc on September 3, 2024 and sell it today you would earn a total of 576.00 from holding LYFT Inc or generate 49.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freight Technologies vs. LYFT Inc
Performance |
| Timeline |
| Freight Technologies |
| LYFT Inc |
Freight Technologies and LYFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freight Technologies and LYFT
The main advantage of trading using opposite Freight Technologies and LYFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freight Technologies position performs unexpectedly, LYFT 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 LYFT will offset losses from the drop in LYFT's long position.| Freight Technologies vs. Salesforce | Freight Technologies vs. Workday | Freight Technologies vs. Unity Software |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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