Correlation Between Loews Corp and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Loews Corp and CaliberCos 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 Loews Corp and CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and CaliberCos Class A, you can compare the effects of market volatilities on Loews Corp and CaliberCos 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 Loews Corp with a short position of CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and CaliberCos.
Diversification Opportunities for Loews Corp and CaliberCos
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loews and CaliberCos is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A and Loews Corp 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 Loews Corp are associated (or correlated) with CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Loews Corp i.e., Loews Corp and CaliberCos go up and down completely randomly.
Pair Corralation between Loews Corp and CaliberCos
Taking into account the 90-day investment horizon Loews Corp is expected to generate 0.2 times more return on investment than CaliberCos. However, Loews Corp is 5.07 times less risky than CaliberCos. It trades about 0.1 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.02 per unit of risk. If you would invest 7,801 in Loews Corp on September 12, 2024 and sell it today you would earn a total of 605.00 from holding Loews Corp or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. CaliberCos Class A
Performance |
| Timeline |
| Loews Corp |
| CaliberCos Class A |
Loews Corp and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and CaliberCos
The main advantage of trading using opposite Loews Corp and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| CaliberCos vs. Contagious Gaming | CaliberCos vs. Newpark Resources | CaliberCos vs. Tritent International Agriculture | CaliberCos vs. Tyson Foods |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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