Correlation Between HHG Capital and Ladenburg Thalmann
Can any of the company-specific risk be diversified away by investing in both HHG Capital and Ladenburg Thalmann 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 HHG Capital and Ladenburg Thalmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HHG Capital Corp and Ladenburg Thalmann Financial, you can compare the effects of market volatilities on HHG Capital and Ladenburg Thalmann 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 HHG Capital with a short position of Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of HHG Capital and Ladenburg Thalmann.
Diversification Opportunities for HHG Capital and Ladenburg Thalmann
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HHG and Ladenburg is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HHG Capital Corp and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and HHG Capital 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 HHG Capital Corp are associated (or correlated) with Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of HHG Capital i.e., HHG Capital and Ladenburg Thalmann go up and down completely randomly.
Pair Corralation between HHG Capital and Ladenburg Thalmann
If you would invest 1,101 in HHG Capital Corp on September 12, 2024 and sell it today you would earn a total of 49.00 from holding HHG Capital Corp or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.35% |
| Values | Daily Returns |
HHG Capital Corp vs. Ladenburg Thalmann Financial
Performance |
| Timeline |
| HHG Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ladenburg Thalmann |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HHG Capital and Ladenburg Thalmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HHG Capital and Ladenburg Thalmann
The main advantage of trading using opposite HHG Capital and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HHG Capital position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.The idea behind HHG Capital Corp and Ladenburg Thalmann Financial 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.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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