Correlation Between Intuitive Investments and LBG Media
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and LBG Media 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 Intuitive Investments and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and LBG Media PLC, you can compare the effects of market volatilities on Intuitive Investments and LBG Media 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 Intuitive Investments with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and LBG Media.
Diversification Opportunities for Intuitive Investments and LBG Media
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intuitive and LBG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and LBG Media go up and down completely randomly.
Pair Corralation between Intuitive Investments and LBG Media
Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the LBG Media. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Investments Group is 1.94 times less risky than LBG Media. The stock trades about -0.13 of its potential returns per unit of risk. The LBG Media PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,800 in LBG Media PLC on September 3, 2024 and sell it today you would earn a total of 1,900 from holding LBG Media PLC or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. LBG Media PLC
Performance |
| Timeline |
| Intuitive Investments |
| LBG Media PLC |
Intuitive Investments and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and LBG Media
The main advantage of trading using opposite Intuitive Investments and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Intuitive Investments vs. SupplyMe Capital PLC | Intuitive Investments vs. 88 Energy | Intuitive Investments vs. Vodafone Group PLC | Intuitive Investments vs. Vodafone Group PLC |
| LBG Media vs. Intuitive Investments Group | LBG Media vs. European Metals Holdings | LBG Media vs. Athelney Trust plc | LBG Media vs. Invesco Health Care |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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