Correlation Between Loop Media and Small Cap
Can any of the company-specific risk be diversified away by investing in both Loop Media and Small Cap 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 Loop Media and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Media and Small Cap Premium, you can compare the effects of market volatilities on Loop Media and Small Cap 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 Loop Media with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Media and Small Cap.
Diversification Opportunities for Loop Media and Small Cap
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loop and Small is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Loop Media and Small Cap Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Premium and Loop Media 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 Loop Media are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Premium has no effect on the direction of Loop Media i.e., Loop Media and Small Cap go up and down completely randomly.
Pair Corralation between Loop Media and Small Cap
Given the investment horizon of 90 days Loop Media is expected to under-perform the Small Cap. In addition to that, Loop Media is 19.48 times more volatile than Small Cap Premium. It trades about -0.07 of its total potential returns per unit of risk. Small Cap Premium is currently generating about 0.08 per unit of volatility. If you would invest 2,019 in Small Cap Premium on September 3, 2024 and sell it today you would earn a total of 441.00 from holding Small Cap Premium or generate 21.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.65% |
| Values | Daily Returns |
Loop Media vs. Small Cap Premium
Performance |
| Timeline |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Small Cap Premium |
Loop Media and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Media and Small Cap
The main advantage of trading using opposite Loop Media and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Media position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Loop Media vs. Summit Materials | Loop Media vs. BOS Better Online | Loop Media vs. Eldorado Gold Corp | Loop Media vs. Highway Holdings Limited |
| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. First Trust Enhanced | Small Cap vs. Ready Capital |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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