Correlation Between LBG Media and Morgan Advanced
Can any of the company-specific risk be diversified away by investing in both LBG Media and Morgan Advanced 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 Morgan Advanced 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 Morgan Advanced Materials, you can compare the effects of market volatilities on LBG Media and Morgan Advanced 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Morgan Advanced.
Diversification Opportunities for LBG Media and Morgan Advanced
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LBG and Morgan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of LBG Media i.e., LBG Media and Morgan Advanced go up and down completely randomly.
Pair Corralation between LBG Media and Morgan Advanced
Assuming the 90 days trading horizon LBG Media PLC is expected to under-perform the Morgan Advanced. In addition to that, LBG Media is 1.51 times more volatile than Morgan Advanced Materials. It trades about -0.15 of its total potential returns per unit of risk. Morgan Advanced Materials is currently generating about 0.29 per unit of volatility. If you would invest 24,350 in Morgan Advanced Materials on September 4, 2024 and sell it today you would earn a total of 1,850 from holding Morgan Advanced Materials or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Morgan Advanced Materials
Performance |
| Timeline |
| LBG Media PLC |
| Morgan Advanced Materials |
LBG Media and Morgan Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Morgan Advanced
The main advantage of trading using opposite LBG Media and Morgan Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Morgan Advanced 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 Morgan Advanced will offset losses from the drop in Morgan Advanced's long position.| LBG Media vs. Quadrise Plc | LBG Media vs. ImmuPharma PLC | LBG Media vs. Intuitive Investments Group | LBG Media vs. European Metals Holdings |
| Morgan Advanced vs. Caledonia Mining | Morgan Advanced vs. Kinnevik Investment AB | Morgan Advanced vs. Anglesey Mining | Morgan Advanced vs. Greenroc Mining 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |