Correlation Between Ithaca Energy and Lords Grp
Can any of the company-specific risk be diversified away by investing in both Ithaca Energy and Lords Grp 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 Ithaca Energy and Lords Grp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ithaca Energy PLC and Lords Grp Trading, you can compare the effects of market volatilities on Ithaca Energy and Lords Grp 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 Ithaca Energy with a short position of Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ithaca Energy and Lords Grp.
Diversification Opportunities for Ithaca Energy and Lords Grp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ithaca and Lords is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ithaca Energy PLC and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp Trading and Ithaca Energy 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 Ithaca Energy PLC are associated (or correlated) with Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of Ithaca Energy i.e., Ithaca Energy and Lords Grp go up and down completely randomly.
Pair Corralation between Ithaca Energy and Lords Grp
Assuming the 90 days trading horizon Ithaca Energy PLC is expected to generate 1.04 times more return on investment than Lords Grp. However, Ithaca Energy is 1.04 times more volatile than Lords Grp Trading. It trades about 0.47 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.02 per unit of risk. If you would invest 10,820 in Ithaca Energy PLC on October 14, 2024 and sell it today you would earn a total of 2,160 from holding Ithaca Energy PLC or generate 19.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ithaca Energy PLC vs. Lords Grp Trading
Performance |
| Timeline |
| Ithaca Energy PLC |
| Lords Grp Trading |
Ithaca Energy and Lords Grp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ithaca Energy and Lords Grp
The main advantage of trading using opposite Ithaca Energy and Lords Grp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ithaca Energy position performs unexpectedly, Lords Grp 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 Lords Grp will offset losses from the drop in Lords Grp's long position.| Ithaca Energy vs. Atalaya Mining | Ithaca Energy vs. Anglo Asian Mining | Ithaca Energy vs. MTI Wireless Edge | Ithaca Energy vs. Hollywood Bowl Group |
| Lords Grp vs. Verizon Communications | Lords Grp vs. Taiwan Semiconductor Manufacturing | Lords Grp vs. Take Two Interactive Software | Lords Grp vs. Cairo Communication SpA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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