Correlation Between Legend Power and Current Water
Can any of the company-specific risk be diversified away by investing in both Legend Power and Current Water 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 Legend Power and Current Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legend Power Systems and Current Water Technologies, you can compare the effects of market volatilities on Legend Power and Current Water 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 Legend Power with a short position of Current Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Power and Current Water.
Diversification Opportunities for Legend Power and Current Water
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legend and Current is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Legend Power Systems and Current Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Current Water Techno and Legend Power 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 Legend Power Systems are associated (or correlated) with Current Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Current Water Techno has no effect on the direction of Legend Power i.e., Legend Power and Current Water go up and down completely randomly.
Pair Corralation between Legend Power and Current Water
Assuming the 90 days horizon Legend Power Systems is expected to generate 0.34 times more return on investment than Current Water. However, Legend Power Systems is 2.97 times less risky than Current Water. It trades about -0.06 of its potential returns per unit of risk. Current Water Technologies is currently generating about -0.05 per unit of risk. If you would invest 22.00 in Legend Power Systems on September 12, 2024 and sell it today you would lose (2.00) from holding Legend Power Systems or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Power Systems vs. Current Water Technologies
Performance |
| Timeline |
| Legend Power Systems |
| Current Water Techno |
Legend Power and Current Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Power and Current Water
The main advantage of trading using opposite Legend Power and Current Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Power position performs unexpectedly, Current Water 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 Current Water will offset losses from the drop in Current Water's long position.| Legend Power vs. Current Water Technologies | Legend Power vs. Plurilock Security | Legend Power vs. PowerBand Solutions | Legend Power vs. iShares Canadian HYBrid |
| Current Water vs. Plurilock Security | Current Water vs. PowerBand Solutions | Current Water vs. iShares Canadian HYBrid | Current Water vs. Solar Alliance Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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