Correlation Between Litigation Capital and State Bank
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and State Bank 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 Litigation Capital and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and State Bank of, you can compare the effects of market volatilities on Litigation Capital and State Bank 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 Litigation Capital with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and State Bank.
Diversification Opportunities for Litigation Capital and State Bank
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Litigation and State is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Litigation Capital i.e., Litigation Capital and State Bank go up and down completely randomly.
Pair Corralation between Litigation Capital and State Bank
Assuming the 90 days trading horizon Litigation Capital is expected to generate 2.69 times less return on investment than State Bank. In addition to that, Litigation Capital is 1.08 times more volatile than State Bank of. It trades about 0.01 of its total potential returns per unit of risk. State Bank of is currently generating about 0.03 per unit of volatility. If you would invest 9,423 in State Bank of on September 3, 2024 and sell it today you would earn a total of 547.00 from holding State Bank of or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. State Bank of
Performance |
| Timeline |
| Litigation Capital |
| State Bank |
Litigation Capital and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and State Bank
The main advantage of trading using opposite Litigation Capital and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| Litigation Capital vs. Federal Realty Investment | Litigation Capital vs. The Investment | Litigation Capital vs. Applied Materials | Litigation Capital vs. Bankers Investment Trust |
| State Bank vs. SupplyMe Capital PLC | State Bank vs. 88 Energy | State Bank vs. Vodafone Group PLC | State Bank vs. Vodafone Group PLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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