Correlation Between Intelligent Living and Limbach Holdings
Can any of the company-specific risk be diversified away by investing in both Intelligent Living and Limbach Holdings 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 Intelligent Living and Limbach Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelligent Living Application and Limbach Holdings, you can compare the effects of market volatilities on Intelligent Living and Limbach Holdings 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 Intelligent Living with a short position of Limbach Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelligent Living and Limbach Holdings.
Diversification Opportunities for Intelligent Living and Limbach Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intelligent and Limbach is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Living Application and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings and Intelligent Living 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 Intelligent Living Application are associated (or correlated) with Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of Intelligent Living i.e., Intelligent Living and Limbach Holdings go up and down completely randomly.
Pair Corralation between Intelligent Living and Limbach Holdings
Given the investment horizon of 90 days Intelligent Living Application is expected to under-perform the Limbach Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Intelligent Living Application is 1.81 times less risky than Limbach Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Limbach Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7,878 in Limbach Holdings on August 30, 2024 and sell it today you would earn a total of 1,998 from holding Limbach Holdings or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intelligent Living Application vs. Limbach Holdings
Performance |
| Timeline |
| Intelligent Living |
| Limbach Holdings |
Intelligent Living and Limbach Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intelligent Living and Limbach Holdings
The main advantage of trading using opposite Intelligent Living and Limbach Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Living position performs unexpectedly, Limbach Holdings 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 Limbach Holdings will offset losses from the drop in Limbach Holdings' long position.| Intelligent Living vs. Azek Company | Intelligent Living vs. Atlas Engineered Products | Intelligent Living vs. Antelope Enterprise Holdings | Intelligent Living vs. Latham Group |
| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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