Correlation Between LSI Software and Logintrade
Can any of the company-specific risk be diversified away by investing in both LSI Software and Logintrade 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 LSI Software and Logintrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Software SA and Logintrade SA, you can compare the effects of market volatilities on LSI Software and Logintrade 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 LSI Software with a short position of Logintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Software and Logintrade.
Diversification Opportunities for LSI Software and Logintrade
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LSI and Logintrade is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and Logintrade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logintrade SA and LSI Software 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 LSI Software SA are associated (or correlated) with Logintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logintrade SA has no effect on the direction of LSI Software i.e., LSI Software and Logintrade go up and down completely randomly.
Pair Corralation between LSI Software and Logintrade
Assuming the 90 days trading horizon LSI Software SA is expected to under-perform the Logintrade. But the stock apears to be less risky and, when comparing its historical volatility, LSI Software SA is 1.72 times less risky than Logintrade. The stock trades about -0.04 of its potential returns per unit of risk. The Logintrade SA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Logintrade SA on August 23, 2024 and sell it today you would earn a total of 34.00 from holding Logintrade SA or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
LSI Software SA vs. Logintrade SA
Performance |
| Timeline |
| LSI Software SA |
| Logintrade SA |
LSI Software and Logintrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Software and Logintrade
The main advantage of trading using opposite LSI Software and Logintrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Software position performs unexpectedly, Logintrade 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 Logintrade will offset losses from the drop in Logintrade's long position.| LSI Software vs. Marie Brizard Wine | LSI Software vs. 3R Games SA | LSI Software vs. TEN SQUARE GAMES | LSI Software vs. Pyramid Games SA |
| Logintrade vs. LSI Software SA | Logintrade vs. SOFTWARE MANSION SPOLKA | Logintrade vs. Quantum Software SA | Logintrade vs. Medicofarma Biotech SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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