Correlation Between Libra Insurance and Fantasy Network
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Fantasy Network 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 Libra Insurance and Fantasy Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Fantasy Network, you can compare the effects of market volatilities on Libra Insurance and Fantasy Network 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 Libra Insurance with a short position of Fantasy Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Fantasy Network.
Diversification Opportunities for Libra Insurance and Fantasy Network
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Libra and Fantasy is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Fantasy Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fantasy Network and Libra Insurance 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 Libra Insurance are associated (or correlated) with Fantasy Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fantasy Network has no effect on the direction of Libra Insurance i.e., Libra Insurance and Fantasy Network go up and down completely randomly.
Pair Corralation between Libra Insurance and Fantasy Network
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.66 times more return on investment than Fantasy Network. However, Libra Insurance is 1.51 times less risky than Fantasy Network. It trades about 0.13 of its potential returns per unit of risk. Fantasy Network is currently generating about -0.05 per unit of risk. If you would invest 31,600 in Libra Insurance on August 29, 2024 and sell it today you would earn a total of 51,110 from holding Libra Insurance or generate 161.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Fantasy Network
Performance |
| Timeline |
| Libra Insurance |
| Fantasy Network |
Libra Insurance and Fantasy Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Fantasy Network
The main advantage of trading using opposite Libra Insurance and Fantasy Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Fantasy Network 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 Fantasy Network will offset losses from the drop in Fantasy Network's long position.The idea behind Libra Insurance and Fantasy Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fantasy Network vs. Bank Leumi Le Israel | Fantasy Network vs. Teva Pharmaceutical Industries | Fantasy Network vs. Bank Hapoalim | Fantasy Network vs. Elbit Systems |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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