Correlation Between LPL Financial and Interactive Brokers
Can any of the company-specific risk be diversified away by investing in both LPL Financial and Interactive Brokers 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 LPL Financial and Interactive Brokers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPL Financial Holdings and Interactive Brokers Group, you can compare the effects of market volatilities on LPL Financial and Interactive Brokers 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 LPL Financial with a short position of Interactive Brokers. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPL Financial and Interactive Brokers.
Diversification Opportunities for LPL Financial and Interactive Brokers
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LPL and Interactive is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Interactive Brokers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Brokers and LPL Financial 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 LPL Financial Holdings are associated (or correlated) with Interactive Brokers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Brokers has no effect on the direction of LPL Financial i.e., LPL Financial and Interactive Brokers go up and down completely randomly.
Pair Corralation between LPL Financial and Interactive Brokers
Given the investment horizon of 90 days LPL Financial is expected to generate 2.01 times less return on investment than Interactive Brokers. In addition to that, LPL Financial is 1.21 times more volatile than Interactive Brokers Group. It trades about 0.05 of its total potential returns per unit of risk. Interactive Brokers Group is currently generating about 0.11 per unit of volatility. If you would invest 7,796 in Interactive Brokers Group on August 27, 2024 and sell it today you would earn a total of 11,366 from holding Interactive Brokers Group or generate 145.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPL Financial Holdings vs. Interactive Brokers Group
Performance |
| Timeline |
| LPL Financial Holdings |
| Interactive Brokers |
LPL Financial and Interactive Brokers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPL Financial and Interactive Brokers
The main advantage of trading using opposite LPL Financial and Interactive Brokers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPL Financial position performs unexpectedly, Interactive Brokers 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 Interactive Brokers will offset losses from the drop in Interactive Brokers' long position.| LPL Financial vs. Tradeweb Markets | LPL Financial vs. Raymond James Financial | LPL Financial vs. PJT Partners | LPL Financial vs. Moelis Co |
| Interactive Brokers vs. Stagwell | Interactive Brokers vs. Sellas Life Sciences | Interactive Brokers vs. Organic Sales and | Interactive Brokers vs. Centessa Pharmaceuticals 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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