Correlation Between Lighthouse Capital and Motus Holdings
Can any of the company-specific risk be diversified away by investing in both Lighthouse Capital and Motus Holdings 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 Lighthouse Capital and Motus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lighthouse Capital and Motus Holdings, you can compare the effects of market volatilities on Lighthouse Capital and Motus Holdings 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 Lighthouse Capital with a short position of Motus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lighthouse Capital and Motus Holdings.
Diversification Opportunities for Lighthouse Capital and Motus Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lighthouse and Motus is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lighthouse Capital and Motus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motus Holdings and Lighthouse Capital 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 Lighthouse Capital are associated (or correlated) with Motus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motus Holdings has no effect on the direction of Lighthouse Capital i.e., Lighthouse Capital and Motus Holdings go up and down completely randomly.
Pair Corralation between Lighthouse Capital and Motus Holdings
Assuming the 90 days trading horizon Lighthouse Capital is expected to under-perform the Motus Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Lighthouse Capital is 1.95 times less risky than Motus Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Motus Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,185,947 in Motus Holdings on August 31, 2024 and sell it today you would earn a total of 59,553 from holding Motus Holdings or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lighthouse Capital vs. Motus Holdings
Performance |
| Timeline |
| Lighthouse Capital |
| Motus Holdings |
Lighthouse Capital and Motus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lighthouse Capital and Motus Holdings
The main advantage of trading using opposite Lighthouse Capital and Motus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lighthouse Capital position performs unexpectedly, Motus Holdings 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 Motus Holdings will offset losses from the drop in Motus Holdings' long position.| Lighthouse Capital vs. Ascendis Health | Lighthouse Capital vs. Copper 360 | Lighthouse Capital vs. Harmony Gold Mining | Lighthouse Capital vs. HomeChoice Investments |
| Motus Holdings vs. Copper 360 | Motus Holdings vs. E Media Holdings | Motus Holdings vs. eMedia Holdings Limited | Motus Holdings vs. Reinet Investments SCA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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