Correlation Between LBG Media and Science In
Can any of the company-specific risk be diversified away by investing in both LBG Media and Science In 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 Science In 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 Science in Sport, you can compare the effects of market volatilities on LBG Media and Science In 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 Science In. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Science In.
Diversification Opportunities for LBG Media and Science In
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LBG and Science is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Science in Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science in Sport 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 Science In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science in Sport has no effect on the direction of LBG Media i.e., LBG Media and Science In go up and down completely randomly.
Pair Corralation between LBG Media and Science In
Assuming the 90 days trading horizon LBG Media PLC is expected to under-perform the Science In. In addition to that, LBG Media is 1.42 times more volatile than Science in Sport. It trades about -0.04 of its total potential returns per unit of risk. Science in Sport is currently generating about 0.13 per unit of volatility. If you would invest 2,550 in Science in Sport on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Science in Sport or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Science in Sport
Performance |
| Timeline |
| LBG Media PLC |
| Science in Sport |
LBG Media and Science In Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Science In
The main advantage of trading using opposite LBG Media and Science In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Science In 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 Science In will offset losses from the drop in Science In's long position.| LBG Media vs. Walmart | LBG Media vs. BYD Co | LBG Media vs. Volkswagen AG | LBG Media vs. Volkswagen AG Non Vtg |
| Science In vs. Samsung Electronics Co | Science In vs. Samsung Electronics Co | Science In vs. Toyota Motor Corp | Science In vs. MOL Hungarian Oil |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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