Correlation Between Lease IT and Multibax Public
Can any of the company-specific risk be diversified away by investing in both Lease IT and Multibax Public 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 Lease IT and Multibax Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lease IT Public and Multibax Public, you can compare the effects of market volatilities on Lease IT and Multibax Public 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 Lease IT with a short position of Multibax Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lease IT and Multibax Public.
Diversification Opportunities for Lease IT and Multibax Public
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lease and Multibax is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lease IT Public and Multibax Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multibax Public and Lease IT 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 Lease IT Public are associated (or correlated) with Multibax Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multibax Public has no effect on the direction of Lease IT i.e., Lease IT and Multibax Public go up and down completely randomly.
Pair Corralation between Lease IT and Multibax Public
Assuming the 90 days trading horizon Lease IT Public is expected to generate 0.76 times more return on investment than Multibax Public. However, Lease IT Public is 1.32 times less risky than Multibax Public. It trades about -0.5 of its potential returns per unit of risk. Multibax Public is currently generating about -0.46 per unit of risk. If you would invest 110.00 in Lease IT Public on September 5, 2024 and sell it today you would lose (28.00) from holding Lease IT Public or give up 25.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lease IT Public vs. Multibax Public
Performance |
| Timeline |
| Lease IT Public |
| Multibax Public |
Lease IT and Multibax Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lease IT and Multibax Public
The main advantage of trading using opposite Lease IT and Multibax Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lease IT position performs unexpectedly, Multibax Public 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 Multibax Public will offset losses from the drop in Multibax Public's long position.| Lease IT vs. Multibax Public | Lease IT vs. Forth Smart Service | Lease IT vs. LPN Development Public | Lease IT vs. Netbay Public |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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