Correlation Between LSI Software and Medicalg
Can any of the company-specific risk be diversified away by investing in both LSI Software and Medicalg 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 Medicalg 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 Medicalg, you can compare the effects of market volatilities on LSI Software and Medicalg 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 Medicalg. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Software and Medicalg.
Diversification Opportunities for LSI Software and Medicalg
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LSI and Medicalg is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg 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 Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of LSI Software i.e., LSI Software and Medicalg go up and down completely randomly.
Pair Corralation between LSI Software and Medicalg
Assuming the 90 days trading horizon LSI Software SA is expected to generate 0.65 times more return on investment than Medicalg. However, LSI Software SA is 1.53 times less risky than Medicalg. It trades about 0.03 of its potential returns per unit of risk. Medicalg is currently generating about -0.14 per unit of risk. If you would invest 1,530 in LSI Software SA on October 26, 2024 and sell it today you would earn a total of 30.00 from holding LSI Software SA or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LSI Software SA vs. Medicalg
Performance |
| Timeline |
| LSI Software SA |
| Medicalg |
LSI Software and Medicalg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Software and Medicalg
The main advantage of trading using opposite LSI Software and Medicalg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Software position performs unexpectedly, Medicalg 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 Medicalg will offset losses from the drop in Medicalg's long position.| LSI Software vs. PLAYWAY SA | LSI Software vs. UF Games SA | LSI Software vs. Carlson Investments SA | LSI Software vs. Gamedust SA |
| Medicalg vs. SOFTWARE MANSION SPOLKA | Medicalg vs. UF Games SA | Medicalg vs. True Games Syndicate | Medicalg vs. Logintrade 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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