Correlation Between Limbach Holdings and Inspired Entertainment
Can any of the company-specific risk be diversified away by investing in both Limbach Holdings and Inspired Entertainment 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 Limbach Holdings and Inspired Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limbach Holdings and Inspired Entertainment, you can compare the effects of market volatilities on Limbach Holdings and Inspired Entertainment 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 Limbach Holdings with a short position of Inspired Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limbach Holdings and Inspired Entertainment.
Diversification Opportunities for Limbach Holdings and Inspired Entertainment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Limbach and Inspired is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Limbach Holdings and Inspired Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspired Entertainment and Limbach Holdings 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 Limbach Holdings are associated (or correlated) with Inspired Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspired Entertainment has no effect on the direction of Limbach Holdings i.e., Limbach Holdings and Inspired Entertainment go up and down completely randomly.
Pair Corralation between Limbach Holdings and Inspired Entertainment
Considering the 90-day investment horizon Limbach Holdings is expected to generate 1.77 times more return on investment than Inspired Entertainment. However, Limbach Holdings is 1.77 times more volatile than Inspired Entertainment. It trades about 0.23 of its potential returns per unit of risk. Inspired Entertainment is currently generating about 0.1 per unit of risk. If you would invest 6,036 in Limbach Holdings on September 3, 2024 and sell it today you would earn a total of 3,913 from holding Limbach Holdings or generate 64.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limbach Holdings vs. Inspired Entertainment
Performance |
| Timeline |
| Limbach Holdings |
| Inspired Entertainment |
Limbach Holdings and Inspired Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limbach Holdings and Inspired Entertainment
The main advantage of trading using opposite Limbach Holdings and Inspired Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limbach Holdings position performs unexpectedly, Inspired Entertainment 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 Inspired Entertainment will offset losses from the drop in Inspired Entertainment's long position.| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
| Inspired Entertainment vs. Canterbury Park Holding | Inspired Entertainment vs. Accel Entertainment | Inspired Entertainment vs. Gambling Group | Inspired Entertainment vs. PlayAGS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |