Correlation Between Legacy Iron and Johns Lyng
Can any of the company-specific risk be diversified away by investing in both Legacy Iron and Johns Lyng 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 Legacy Iron and Johns Lyng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legacy Iron Ore and Johns Lyng Group, you can compare the effects of market volatilities on Legacy Iron and Johns Lyng 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 Legacy Iron with a short position of Johns Lyng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legacy Iron and Johns Lyng.
Diversification Opportunities for Legacy Iron and Johns Lyng
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legacy and Johns is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Iron Ore and Johns Lyng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johns Lyng Group and Legacy Iron 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 Legacy Iron Ore are associated (or correlated) with Johns Lyng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johns Lyng Group has no effect on the direction of Legacy Iron i.e., Legacy Iron and Johns Lyng go up and down completely randomly.
Pair Corralation between Legacy Iron and Johns Lyng
Assuming the 90 days trading horizon Legacy Iron Ore is expected to under-perform the Johns Lyng. In addition to that, Legacy Iron is 2.53 times more volatile than Johns Lyng Group. It trades about -0.1 of its total potential returns per unit of risk. Johns Lyng Group is currently generating about 0.24 per unit of volatility. If you would invest 370.00 in Johns Lyng Group on September 4, 2024 and sell it today you would earn a total of 39.00 from holding Johns Lyng Group or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Legacy Iron Ore vs. Johns Lyng Group
Performance |
| Timeline |
| Legacy Iron Ore |
| Johns Lyng Group |
Legacy Iron and Johns Lyng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legacy Iron and Johns Lyng
The main advantage of trading using opposite Legacy Iron and Johns Lyng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legacy Iron position performs unexpectedly, Johns Lyng 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 Johns Lyng will offset losses from the drop in Johns Lyng's long position.| Legacy Iron vs. Hotel Property Investments | Legacy Iron vs. Argo Investments | Legacy Iron vs. Sandon Capital Investments | Legacy Iron vs. Steamships Trading |
| Johns Lyng vs. Clime Investment Management | Johns Lyng vs. Ramsay Health Care | Johns Lyng vs. Thorney Technologies | Johns Lyng vs. Macquarie Technology Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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