Correlation Between Loxley Public and S P

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Can any of the company-specific risk be diversified away by investing in both Loxley Public and S P 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 Loxley Public and S P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loxley Public and S P V, you can compare the effects of market volatilities on Loxley Public and S P 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 Loxley Public with a short position of S P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loxley Public and S P.

Diversification Opportunities for Loxley Public and S P

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Loxley and SPVI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Loxley Public and S P V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S P V and Loxley Public 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 Loxley Public are associated (or correlated) with S P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S P V has no effect on the direction of Loxley Public i.e., Loxley Public and S P go up and down completely randomly.

Pair Corralation between Loxley Public and S P

Assuming the 90 days trading horizon Loxley Public is expected to generate 0.42 times more return on investment than S P. However, Loxley Public is 2.38 times less risky than S P. It trades about -0.09 of its potential returns per unit of risk. S P V is currently generating about -0.34 per unit of risk. If you would invest  141.00  in Loxley Public on August 29, 2024 and sell it today you would lose (3.00) from holding Loxley Public or give up 2.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Loxley Public  vs.  S P V

 Performance 
       Timeline  
Loxley Public 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Loxley Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Loxley Public sustained solid returns over the last few months and may actually be approaching a breakup point.
S P V 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in S P V are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, S P disclosed solid returns over the last few months and may actually be approaching a breakup point.

Loxley Public and S P Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Loxley Public and S P

The main advantage of trading using opposite Loxley Public and S P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loxley Public position performs unexpectedly, S P 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 S P will offset losses from the drop in S P's long position.
The idea behind Loxley Public and S P V pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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