Correlation Between LBG Media and Camellia Plc
Can any of the company-specific risk be diversified away by investing in both LBG Media and Camellia Plc 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 Camellia Plc 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 Camellia Plc, you can compare the effects of market volatilities on LBG Media and Camellia Plc 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 Camellia Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Camellia Plc.
Diversification Opportunities for LBG Media and Camellia Plc
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LBG and Camellia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Camellia Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Plc 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 Camellia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Plc has no effect on the direction of LBG Media i.e., LBG Media and Camellia Plc go up and down completely randomly.
Pair Corralation between LBG Media and Camellia Plc
Assuming the 90 days trading horizon LBG Media PLC is expected to generate 2.27 times more return on investment than Camellia Plc. However, LBG Media is 2.27 times more volatile than Camellia Plc. It trades about 0.01 of its potential returns per unit of risk. Camellia Plc is currently generating about -0.04 per unit of risk. If you would invest 12,750 in LBG Media PLC on September 2, 2024 and sell it today you would lose (50.00) from holding LBG Media PLC or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Camellia Plc
Performance |
| Timeline |
| LBG Media PLC |
| Camellia Plc |
LBG Media and Camellia Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Camellia Plc
The main advantage of trading using opposite LBG Media and Camellia Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Camellia Plc 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 Camellia Plc will offset losses from the drop in Camellia Plc's long position.| LBG Media vs. Edita Food Industries | LBG Media vs. L3Harris Technologies | LBG Media vs. Premier Foods PLC | LBG Media vs. Check Point Software |
| Camellia Plc vs. LBG Media PLC | Camellia Plc vs. Cornish Metals | Camellia Plc vs. Wheaton Precious Metals | Camellia Plc vs. Eastman Chemical Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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