Correlation Between Guinness Atkinson and Lifex Income
Can any of the company-specific risk be diversified away by investing in both Guinness Atkinson and Lifex Income 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 Guinness Atkinson and Lifex Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guinness Atkinson Alternative and Lifex Income, you can compare the effects of market volatilities on Guinness Atkinson and Lifex Income 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 Guinness Atkinson with a short position of Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guinness Atkinson and Lifex Income.
Diversification Opportunities for Guinness Atkinson and Lifex Income
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guinness and Lifex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Alternative and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income and Guinness Atkinson 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 Guinness Atkinson Alternative are associated (or correlated) with Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of Guinness Atkinson i.e., Guinness Atkinson and Lifex Income go up and down completely randomly.
Pair Corralation between Guinness Atkinson and Lifex Income
Assuming the 90 days horizon Guinness Atkinson Alternative is expected to under-perform the Lifex Income. In addition to that, Guinness Atkinson is 2.67 times more volatile than Lifex Income. It trades about -0.05 of its total potential returns per unit of risk. Lifex Income is currently generating about 0.13 per unit of volatility. If you would invest 1,669 in Lifex Income on September 1, 2024 and sell it today you would earn a total of 137.00 from holding Lifex Income or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Guinness Atkinson Alternative vs. Lifex Income
Performance |
| Timeline |
| Guinness Atkinson |
| Lifex Income |
Guinness Atkinson and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guinness Atkinson and Lifex Income
The main advantage of trading using opposite Guinness Atkinson and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guinness Atkinson position performs unexpectedly, Lifex Income 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 Lifex Income will offset losses from the drop in Lifex Income's long position.| Guinness Atkinson vs. New Alternatives Fund | Guinness Atkinson vs. Calvert Global Energy | Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Guinness Atkinson Global |
| Lifex Income vs. Lifex Inflation Protected Income | Lifex Income vs. Lifex Inflation Protected Income | Lifex Income vs. Lifex Inflation Protected Income | Lifex Income vs. Lifex Inflation Protected Income |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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