Correlation Between Lmp Automotive and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both Lmp Automotive and Xcel Brands 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 Lmp Automotive and Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lmp Automotive Holdings and Xcel Brands, you can compare the effects of market volatilities on Lmp Automotive and Xcel Brands 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 Lmp Automotive with a short position of Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lmp Automotive and Xcel Brands.
Diversification Opportunities for Lmp Automotive and Xcel Brands
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lmp and Xcel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lmp Automotive Holdings and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands and Lmp Automotive 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 Lmp Automotive Holdings are associated (or correlated) with Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of Lmp Automotive i.e., Lmp Automotive and Xcel Brands go up and down completely randomly.
Pair Corralation between Lmp Automotive and Xcel Brands
If you would invest 73.00 in Xcel Brands on September 1, 2024 and sell it today you would lose (4.00) from holding Xcel Brands or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Lmp Automotive Holdings vs. Xcel Brands
Performance |
| Timeline |
| Lmp Automotive Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xcel Brands |
Lmp Automotive and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lmp Automotive and Xcel Brands
The main advantage of trading using opposite Lmp Automotive and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lmp Automotive position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| Lmp Automotive vs. CarGurus | Lmp Automotive vs. KAR Auction Services | Lmp Automotive vs. Kingsway Financial Services | Lmp Automotive vs. Driven Brands Holdings |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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