Correlation Between LBG Media and Datalogic
Can any of the company-specific risk be diversified away by investing in both LBG Media and Datalogic 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 LBG Media and Datalogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LBG Media PLC and Datalogic, you can compare the effects of market volatilities on LBG Media and Datalogic 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 LBG Media with a short position of Datalogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Datalogic.
Diversification Opportunities for LBG Media and Datalogic
Very weak diversification
The 3 months correlation between LBG and Datalogic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Datalogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalogic and LBG Media 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 LBG Media PLC are associated (or correlated) with Datalogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalogic has no effect on the direction of LBG Media i.e., LBG Media and Datalogic go up and down completely randomly.
Pair Corralation between LBG Media and Datalogic
Assuming the 90 days trading horizon LBG Media PLC is expected to generate 2.19 times more return on investment than Datalogic. However, LBG Media is 2.19 times more volatile than Datalogic. It trades about 0.2 of its potential returns per unit of risk. Datalogic is currently generating about -0.23 per unit of risk. If you would invest 11,800 in LBG Media PLC on October 11, 2024 and sell it today you would earn a total of 1,300 from holding LBG Media PLC or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Datalogic
Performance |
| Timeline |
| LBG Media PLC |
| Datalogic |
LBG Media and Datalogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Datalogic
The main advantage of trading using opposite LBG Media and Datalogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Datalogic 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 Datalogic will offset losses from the drop in Datalogic's long position.| LBG Media vs. Rheinmetall AG | LBG Media vs. BE Semiconductor Industries | LBG Media vs. EVS Broadcast Equipment | LBG Media vs. Golden Metal Resources |
| Datalogic vs. XLMedia PLC | Datalogic vs. Aptitude Software Group | Datalogic vs. LBG Media PLC | Datalogic vs. Flutter Entertainment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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