Correlation Between LH Shopping and Impact Growth
Can any of the company-specific risk be diversified away by investing in both LH Shopping and Impact Growth 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 LH Shopping and Impact Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LH Shopping Centers and Impact Growth REIT, you can compare the effects of market volatilities on LH Shopping and Impact Growth 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 LH Shopping with a short position of Impact Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Shopping and Impact Growth.
Diversification Opportunities for LH Shopping and Impact Growth
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LHSC and Impact is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding LH Shopping Centers and Impact Growth REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Growth REIT and LH Shopping 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 LH Shopping Centers are associated (or correlated) with Impact Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Growth REIT has no effect on the direction of LH Shopping i.e., LH Shopping and Impact Growth go up and down completely randomly.
Pair Corralation between LH Shopping and Impact Growth
Assuming the 90 days trading horizon LH Shopping Centers is expected to generate 0.63 times more return on investment than Impact Growth. However, LH Shopping Centers is 1.58 times less risky than Impact Growth. It trades about 0.28 of its potential returns per unit of risk. Impact Growth REIT is currently generating about -0.13 per unit of risk. If you would invest 1,073 in LH Shopping Centers on August 31, 2024 and sell it today you would earn a total of 57.00 from holding LH Shopping Centers or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LH Shopping Centers vs. Impact Growth REIT
Performance |
| Timeline |
| LH Shopping Centers |
| Impact Growth REIT |
LH Shopping and Impact Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LH Shopping and Impact Growth
The main advantage of trading using opposite LH Shopping and Impact Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Shopping position performs unexpectedly, Impact Growth 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 Impact Growth will offset losses from the drop in Impact Growth's long position.| LH Shopping vs. LH Hotel Leasehold | LH Shopping vs. Impact Growth REIT | LH Shopping vs. Quality Houses Property | LH Shopping vs. CPN Retail Growth |
| Impact Growth vs. CPN Retail Growth | Impact Growth vs. WHA Premium Growth | Impact Growth vs. Golden Ventures Leasehold | Impact Growth vs. LH Shopping Centers |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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