Correlation Between LCI Industries and ATWEC Technologies
Can any of the company-specific risk be diversified away by investing in both LCI Industries and ATWEC Technologies 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 LCI Industries and ATWEC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCI Industries and ATWEC Technologies, you can compare the effects of market volatilities on LCI Industries and ATWEC Technologies 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 LCI Industries with a short position of ATWEC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCI Industries and ATWEC Technologies.
Diversification Opportunities for LCI Industries and ATWEC Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LCI and ATWEC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding LCI Industries and ATWEC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATWEC Technologies and LCI Industries 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 LCI Industries are associated (or correlated) with ATWEC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATWEC Technologies has no effect on the direction of LCI Industries i.e., LCI Industries and ATWEC Technologies go up and down completely randomly.
Pair Corralation between LCI Industries and ATWEC Technologies
Given the investment horizon of 90 days LCI Industries is expected to generate 21.4 times less return on investment than ATWEC Technologies. But when comparing it to its historical volatility, LCI Industries is 9.89 times less risky than ATWEC Technologies. It trades about 0.04 of its potential returns per unit of risk. ATWEC Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.31 in ATWEC Technologies on September 2, 2024 and sell it today you would lose (0.19) from holding ATWEC Technologies or give up 61.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
LCI Industries vs. ATWEC Technologies
Performance |
| Timeline |
| LCI Industries |
| ATWEC Technologies |
LCI Industries and ATWEC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCI Industries and ATWEC Technologies
The main advantage of trading using opposite LCI Industries and ATWEC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCI Industries position performs unexpectedly, ATWEC Technologies 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 ATWEC Technologies will offset losses from the drop in ATWEC Technologies' long position.| LCI Industries vs. MCBC Holdings | LCI Industries vs. BRP Inc | LCI Industries vs. Malibu Boats | LCI Industries vs. Winnebago Industries |
| ATWEC Technologies vs. Allegion PLC | ATWEC Technologies vs. MSA Safety | ATWEC Technologies vs. HUMANA INC | ATWEC Technologies vs. Aquagold International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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