Correlation Between LCI Industries and Limestone Boat
Can any of the company-specific risk be diversified away by investing in both LCI Industries and Limestone Boat 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 Limestone Boat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCI Industries and The Limestone Boat, you can compare the effects of market volatilities on LCI Industries and Limestone Boat 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 Limestone Boat. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCI Industries and Limestone Boat.
Diversification Opportunities for LCI Industries and Limestone Boat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LCI and Limestone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LCI Industries and The Limestone Boat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limestone Boat 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 Limestone Boat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limestone Boat has no effect on the direction of LCI Industries i.e., LCI Industries and Limestone Boat go up and down completely randomly.
Pair Corralation between LCI Industries and Limestone Boat
Given the investment horizon of 90 days LCI Industries is expected to generate 1.36 times less return on investment than Limestone Boat. But when comparing it to its historical volatility, LCI Industries is 3.09 times less risky than Limestone Boat. It trades about 0.02 of its potential returns per unit of risk. The Limestone Boat is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.76 in The Limestone Boat on November 27, 2024 and sell it today you would lose (0.36) from holding The Limestone Boat or give up 47.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LCI Industries vs. The Limestone Boat
Performance |
| Timeline |
| LCI Industries |
| Limestone Boat |
LCI Industries and Limestone Boat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCI Industries and Limestone Boat
The main advantage of trading using opposite LCI Industries and Limestone Boat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCI Industries position performs unexpectedly, Limestone Boat 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 Limestone Boat will offset losses from the drop in Limestone Boat's long position.| LCI Industries vs. MCBC Holdings | LCI Industries vs. BRP Inc | LCI Industries vs. Malibu Boats | LCI Industries vs. Winnebago Industries |
| Limestone Boat vs. EastGroup Properties | Limestone Boat vs. Q2 Holdings | Limestone Boat vs. Kingdee International Software | Limestone Boat vs. Futuretech II Acquisition |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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