Correlation Between Leo Global and NCL International
Can any of the company-specific risk be diversified away by investing in both Leo Global and NCL International 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 Leo Global and NCL International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leo Global Logistics and NCL International Logistics, you can compare the effects of market volatilities on Leo Global and NCL International 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 Leo Global with a short position of NCL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leo Global and NCL International.
Diversification Opportunities for Leo Global and NCL International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leo and NCL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Leo Global Logistics and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International and Leo Global 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 Leo Global Logistics are associated (or correlated) with NCL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCL International has no effect on the direction of Leo Global i.e., Leo Global and NCL International go up and down completely randomly.
Pair Corralation between Leo Global and NCL International
Assuming the 90 days trading horizon Leo Global Logistics is expected to under-perform the NCL International. But the stock apears to be less risky and, when comparing its historical volatility, Leo Global Logistics is 94.81 times less risky than NCL International. The stock trades about -0.11 of its potential returns per unit of risk. The NCL International Logistics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in NCL International Logistics on September 3, 2024 and sell it today you would earn a total of 49.00 from holding NCL International Logistics or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leo Global Logistics vs. NCL International Logistics
Performance |
| Timeline |
| Leo Global Logistics |
| NCL International |
Leo Global and NCL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leo Global and NCL International
The main advantage of trading using opposite Leo Global and NCL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leo Global position performs unexpectedly, NCL International 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 NCL International will offset losses from the drop in NCL International's long position.| Leo Global vs. Mega Lifesciences Public | Leo Global vs. Sonic Interfreight Public | Leo Global vs. Jay Mart Public | Leo Global vs. AP Public |
| NCL International vs. Kingsmen CMTI Public | NCL International vs. International Research | NCL International vs. Masterkool International Public | NCL International vs. News Network |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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