Correlation Between Legato Merger and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Legato Merger and Cebu Air 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 Legato Merger and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legato Merger II and Cebu Air ADR, you can compare the effects of market volatilities on Legato Merger and Cebu Air 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 Legato Merger with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legato Merger and Cebu Air.
Diversification Opportunities for Legato Merger and Cebu Air
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legato and Cebu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Legato Merger II and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR and Legato Merger 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 Legato Merger II are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of Legato Merger i.e., Legato Merger and Cebu Air go up and down completely randomly.
Pair Corralation between Legato Merger and Cebu Air
If you would invest 250.00 in Legato Merger II on September 14, 2024 and sell it today you would earn a total of 94.00 from holding Legato Merger II or generate 37.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Legato Merger II vs. Cebu Air ADR
Performance |
| Timeline |
| Legato Merger II |
| Cebu Air ADR |
Legato Merger and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legato Merger and Cebu Air
The main advantage of trading using opposite Legato Merger and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legato Merger position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Legato Merger vs. Integrated Drilling Equipment | Legato Merger vs. Videolocity International | Legato Merger vs. Shake Shack | Legato Merger vs. Mills Music Trust |
| Cebu Air vs. Old Republic International | Cebu Air vs. NuRAN Wireless | Cebu Air vs. Siriuspoint | Cebu Air vs. Assurant |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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