Correlation Between London Security and Mobilezone Holding
Can any of the company-specific risk be diversified away by investing in both London Security and Mobilezone Holding 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 London Security and Mobilezone Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between London Security Plc and mobilezone holding AG, you can compare the effects of market volatilities on London Security and Mobilezone Holding 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 London Security with a short position of Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of London Security and Mobilezone Holding.
Diversification Opportunities for London Security and Mobilezone Holding
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between London and Mobilezone is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding London Security Plc and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding and London Security 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 London Security Plc are associated (or correlated) with Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of London Security i.e., London Security and Mobilezone Holding go up and down completely randomly.
Pair Corralation between London Security and Mobilezone Holding
Assuming the 90 days trading horizon London Security Plc is expected to generate 1.1 times more return on investment than Mobilezone Holding. However, London Security is 1.1 times more volatile than mobilezone holding AG. It trades about 0.03 of its potential returns per unit of risk. mobilezone holding AG is currently generating about -0.02 per unit of risk. If you would invest 282,151 in London Security Plc on September 3, 2024 and sell it today you would earn a total of 42,849 from holding London Security Plc or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
London Security Plc vs. mobilezone holding AG
Performance |
| Timeline |
| London Security Plc |
| mobilezone holding |
London Security and Mobilezone Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with London Security and Mobilezone Holding
The main advantage of trading using opposite London Security and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London Security position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.| London Security vs. Griffin Mining | London Security vs. Lundin Mining Corp | London Security vs. Veolia Environnement VE | London Security vs. Caledonia Mining |
| Mobilezone Holding vs. Hochschild Mining plc | Mobilezone Holding vs. Inspiration Healthcare Group | Mobilezone Holding vs. Endeavour Mining Corp | Mobilezone Holding vs. HCA Healthcare |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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