Correlation Between International Investors and Lifex Income
Can any of the company-specific risk be diversified away by investing in both International Investors 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 International Investors and Lifex Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Lifex Income, you can compare the effects of market volatilities on International Investors 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 International Investors with a short position of Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Lifex Income.
Diversification Opportunities for International Investors and Lifex Income
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERNATIONAL and Lifex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income and International Investors 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 International Investors Gold 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 International Investors i.e., International Investors and Lifex Income go up and down completely randomly.
Pair Corralation between International Investors and Lifex Income
If you would invest 1,723 in Lifex Income on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Lifex Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
International Investors Gold vs. Lifex Income
Performance |
| Timeline |
| International Investors |
| Lifex Income |
International Investors and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Lifex Income
The main advantage of trading using opposite International Investors and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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.The idea behind International Investors Gold and Lifex Income 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.
| Lifex Income vs. Short Precious Metals | Lifex Income vs. Europac Gold Fund | Lifex Income vs. International Investors Gold | Lifex Income vs. Oppenheimer Gold Special |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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