Correlation Between Imperial Brands and Ladybug Resource
Can any of the company-specific risk be diversified away by investing in both Imperial Brands and Ladybug Resource 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 Imperial Brands and Ladybug Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Brands PLC and Ladybug Resource Group, you can compare the effects of market volatilities on Imperial Brands and Ladybug Resource 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 Imperial Brands with a short position of Ladybug Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Brands and Ladybug Resource.
Diversification Opportunities for Imperial Brands and Ladybug Resource
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Imperial and Ladybug is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Brands PLC and Ladybug Resource Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladybug Resource and Imperial Brands 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 Imperial Brands PLC are associated (or correlated) with Ladybug Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladybug Resource has no effect on the direction of Imperial Brands i.e., Imperial Brands and Ladybug Resource go up and down completely randomly.
Pair Corralation between Imperial Brands and Ladybug Resource
Assuming the 90 days horizon Imperial Brands is expected to generate 1.01 times less return on investment than Ladybug Resource. But when comparing it to its historical volatility, Imperial Brands PLC is 12.37 times less risky than Ladybug Resource. It trades about 0.22 of its potential returns per unit of risk. Ladybug Resource Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Ladybug Resource Group on September 1, 2024 and sell it today you would lose (0.85) from holding Ladybug Resource Group or give up 56.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Brands PLC vs. Ladybug Resource Group
Performance |
| Timeline |
| Imperial Brands PLC |
| Ladybug Resource |
Imperial Brands and Ladybug Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Brands and Ladybug Resource
The main advantage of trading using opposite Imperial Brands and Ladybug Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Brands position performs unexpectedly, Ladybug Resource 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 Ladybug Resource will offset losses from the drop in Ladybug Resource's long position.| Imperial Brands vs. Signet International Holdings | Imperial Brands vs. National Beverage Corp | Imperial Brands vs. PT Astra International | Imperial Brands vs. Vita Coco |
| Ladybug Resource vs. Altria Group | Ladybug Resource vs. British American Tobacco | Ladybug Resource vs. Universal | Ladybug Resource vs. Imperial Brands PLC |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |