Correlation Between LBG Media and Insig Ai
Can any of the company-specific risk be diversified away by investing in both LBG Media and Insig Ai 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 Insig Ai 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 Insig Ai PLC, you can compare the effects of market volatilities on LBG Media and Insig Ai 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 Insig Ai. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Insig Ai.
Diversification Opportunities for LBG Media and Insig Ai
Very good diversification
The 3 months correlation between LBG and Insig is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Insig Ai PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insig Ai 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 Insig Ai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insig Ai PLC has no effect on the direction of LBG Media i.e., LBG Media and Insig Ai go up and down completely randomly.
Pair Corralation between LBG Media and Insig Ai
Assuming the 90 days trading horizon LBG Media PLC is expected to generate 1.12 times more return on investment than Insig Ai. However, LBG Media is 1.12 times more volatile than Insig Ai PLC. It trades about -0.08 of its potential returns per unit of risk. Insig Ai PLC is currently generating about -0.27 per unit of risk. If you would invest 13,500 in LBG Media PLC on August 31, 2024 and sell it today you would lose (500.00) from holding LBG Media PLC or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Insig Ai PLC
Performance |
| Timeline |
| LBG Media PLC |
| Insig Ai PLC |
LBG Media and Insig Ai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Insig Ai
The main advantage of trading using opposite LBG Media and Insig Ai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Insig Ai 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 Insig Ai will offset losses from the drop in Insig Ai's long position.| LBG Media vs. Gear4music Plc | LBG Media vs. MediaZest plc | LBG Media vs. bet at home AG | LBG Media vs. Flutter Entertainment PLC |
| Insig Ai vs. Eastman Chemical Co | Insig Ai vs. American Tower REIT | Insig Ai vs. Ameriprise Financial | Insig Ai vs. Ibstock 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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