Correlation Between INX Digital and LifeSpeak
Can any of the company-specific risk be diversified away by investing in both INX Digital and LifeSpeak 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 INX Digital and LifeSpeak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The INX Digital and LifeSpeak, you can compare the effects of market volatilities on INX Digital and LifeSpeak 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 INX Digital with a short position of LifeSpeak. Check out your portfolio center. Please also check ongoing floating volatility patterns of INX Digital and LifeSpeak.
Diversification Opportunities for INX Digital and LifeSpeak
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between INX and LifeSpeak is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The INX Digital and LifeSpeak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeSpeak and INX Digital 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 The INX Digital are associated (or correlated) with LifeSpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeSpeak has no effect on the direction of INX Digital i.e., INX Digital and LifeSpeak go up and down completely randomly.
Pair Corralation between INX Digital and LifeSpeak
Assuming the 90 days horizon The INX Digital is expected to generate 1.78 times more return on investment than LifeSpeak. However, INX Digital is 1.78 times more volatile than LifeSpeak. It trades about 0.06 of its potential returns per unit of risk. LifeSpeak is currently generating about -0.21 per unit of risk. If you would invest 5.30 in The INX Digital on August 28, 2024 and sell it today you would earn a total of 0.13 from holding The INX Digital or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The INX Digital vs. LifeSpeak
Performance |
| Timeline |
| INX Digital |
| LifeSpeak |
INX Digital and LifeSpeak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INX Digital and LifeSpeak
The main advantage of trading using opposite INX Digital and LifeSpeak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INX Digital position performs unexpectedly, LifeSpeak 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 LifeSpeak will offset losses from the drop in LifeSpeak's long position.| INX Digital vs. 01 Communique Laboratory | INX Digital vs. LifeSpeak | INX Digital vs. RESAAS Services | INX Digital vs. RenoWorks Software |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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