Correlation Between Immobile and LSI Software
Can any of the company-specific risk be diversified away by investing in both Immobile and LSI Software 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 Immobile and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immobile and LSI Software SA, you can compare the effects of market volatilities on Immobile and LSI Software 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 Immobile with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immobile and LSI Software.
Diversification Opportunities for Immobile and LSI Software
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Immobile and LSI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Immobile and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA and Immobile 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 Immobile are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of Immobile i.e., Immobile and LSI Software go up and down completely randomly.
Pair Corralation between Immobile and LSI Software
Assuming the 90 days trading horizon Immobile is expected to generate 2.73 times less return on investment than LSI Software. In addition to that, Immobile is 1.39 times more volatile than LSI Software SA. It trades about 0.01 of its total potential returns per unit of risk. LSI Software SA is currently generating about 0.05 per unit of volatility. If you would invest 1,130 in LSI Software SA on September 5, 2024 and sell it today you would earn a total of 550.00 from holding LSI Software SA or generate 48.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immobile vs. LSI Software SA
Performance |
| Timeline |
| Immobile |
| LSI Software SA |
Immobile and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immobile and LSI Software
The main advantage of trading using opposite Immobile and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immobile position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.The idea behind Immobile and LSI Software SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LSI Software vs. New Tech Venture | LSI Software vs. Quantum Software SA | LSI Software vs. Carlson Investments SA | LSI Software vs. SOFTWARE MANSION SPOLKA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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