Correlation Between Liquidity Services and D MARKET
Can any of the company-specific risk be diversified away by investing in both Liquidity Services and D MARKET 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 Liquidity Services and D MARKET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liquidity Services and D MARKET Electronic Services, you can compare the effects of market volatilities on Liquidity Services and D MARKET 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 Liquidity Services with a short position of D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liquidity Services and D MARKET.
Diversification Opportunities for Liquidity Services and D MARKET
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Liquidity and HEPS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Liquidity Services and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic and Liquidity Services 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 Liquidity Services are associated (or correlated) with D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of Liquidity Services i.e., Liquidity Services and D MARKET go up and down completely randomly.
Pair Corralation between Liquidity Services and D MARKET
Given the investment horizon of 90 days Liquidity Services is expected to generate 0.68 times more return on investment than D MARKET. However, Liquidity Services is 1.47 times less risky than D MARKET. It trades about 0.36 of its potential returns per unit of risk. D MARKET Electronic Services is currently generating about -0.28 per unit of risk. If you would invest 2,167 in Liquidity Services on August 24, 2024 and sell it today you would earn a total of 351.00 from holding Liquidity Services or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liquidity Services vs. D MARKET Electronic Services
Performance |
| Timeline |
| Liquidity Services |
| D MARKET Electronic |
Liquidity Services and D MARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liquidity Services and D MARKET
The main advantage of trading using opposite Liquidity Services and D MARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liquidity Services position performs unexpectedly, D MARKET 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 D MARKET will offset losses from the drop in D MARKET's long position.| Liquidity Services vs. Qurate Retail Series | Liquidity Services vs. Qurate Retail | Liquidity Services vs. Dada Nexus | Liquidity Services vs. Natural Health Trend |
| D MARKET vs. Liquidity Services | D MARKET vs. 1StdibsCom | D MARKET vs. Natural Health Trend | D MARKET vs. Hour Loop |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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