Correlation Between Leland Thomson and Transamerica Capital
Can any of the company-specific risk be diversified away by investing in both Leland Thomson and Transamerica Capital 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 Leland Thomson and Transamerica Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leland Thomson Reuters and Transamerica Capital Growth, you can compare the effects of market volatilities on Leland Thomson and Transamerica Capital 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 Leland Thomson with a short position of Transamerica Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leland Thomson and Transamerica Capital.
Diversification Opportunities for Leland Thomson and Transamerica Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Leland and Transamerica is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Leland Thomson Reuters and Transamerica Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Capital and Leland Thomson 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 Leland Thomson Reuters are associated (or correlated) with Transamerica Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Capital has no effect on the direction of Leland Thomson i.e., Leland Thomson and Transamerica Capital go up and down completely randomly.
Pair Corralation between Leland Thomson and Transamerica Capital
Assuming the 90 days horizon Leland Thomson Reuters is expected to generate 1.02 times more return on investment than Transamerica Capital. However, Leland Thomson is 1.02 times more volatile than Transamerica Capital Growth. It trades about -0.14 of its potential returns per unit of risk. Transamerica Capital Growth is currently generating about -0.25 per unit of risk. If you would invest 2,667 in Leland Thomson Reuters on December 1, 2024 and sell it today you would lose (148.00) from holding Leland Thomson Reuters or give up 5.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leland Thomson Reuters vs. Transamerica Capital Growth
Performance |
| Timeline |
| Leland Thomson Reuters |
| Transamerica Capital |
Leland Thomson and Transamerica Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leland Thomson and Transamerica Capital
The main advantage of trading using opposite Leland Thomson and Transamerica Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leland Thomson position performs unexpectedly, Transamerica Capital 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 Transamerica Capital will offset losses from the drop in Transamerica Capital's long position.| Leland Thomson vs. Direxion Monthly Nasdaq 100 | Leland Thomson vs. Nasdaq 100 2x Strategy | Leland Thomson vs. Nasdaq 100 2x Strategy | Leland Thomson vs. Ultranasdaq 100 Profund Ultranasdaq 100 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |