Correlation Between Lennox International and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both Lennox International and FUTURE GAMING 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 Lennox International and FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennox International and FUTURE GAMING GRP, you can compare the effects of market volatilities on Lennox International and FUTURE GAMING 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 Lennox International with a short position of FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennox International and FUTURE GAMING.
Diversification Opportunities for Lennox International and FUTURE GAMING
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lennox and FUTURE is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lennox International and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP and Lennox International 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 Lennox International are associated (or correlated) with FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of Lennox International i.e., Lennox International and FUTURE GAMING go up and down completely randomly.
Pair Corralation between Lennox International and FUTURE GAMING
Assuming the 90 days horizon Lennox International is expected to generate 0.54 times more return on investment than FUTURE GAMING. However, Lennox International is 1.86 times less risky than FUTURE GAMING. It trades about 0.13 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about -0.46 per unit of risk. If you would invest 59,903 in Lennox International on October 20, 2024 and sell it today you would earn a total of 2,257 from holding Lennox International or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lennox International vs. FUTURE GAMING GRP
Performance |
| Timeline |
| Lennox International |
| FUTURE GAMING GRP |
Lennox International and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lennox International and FUTURE GAMING
The main advantage of trading using opposite Lennox International and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennox International position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| Lennox International vs. ATRESMEDIA | Lennox International vs. Retail Estates NV | Lennox International vs. JIAHUA STORES | Lennox International vs. FAST RETAIL ADR |
| FUTURE GAMING vs. SQUIRREL MEDIA SA | FUTURE GAMING vs. GigaMedia | FUTURE GAMING vs. Safety Insurance Group | FUTURE GAMING vs. LINMON MEDIA LTD |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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