Correlation Between Lsb Industries and Univar
Can any of the company-specific risk be diversified away by investing in both Lsb Industries and Univar 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 Lsb Industries and Univar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsb Industries and Univar Inc, you can compare the effects of market volatilities on Lsb Industries and Univar 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 Lsb Industries with a short position of Univar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsb Industries and Univar.
Diversification Opportunities for Lsb Industries and Univar
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsb and Univar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lsb Industries and Univar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univar Inc and Lsb Industries 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 Lsb Industries are associated (or correlated) with Univar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univar Inc has no effect on the direction of Lsb Industries i.e., Lsb Industries and Univar go up and down completely randomly.
Pair Corralation between Lsb Industries and Univar
Considering the 90-day investment horizon Lsb Industries is expected to under-perform the Univar. In addition to that, Lsb Industries is 1.87 times more volatile than Univar Inc. It trades about -0.01 of its total potential returns per unit of risk. Univar Inc is currently generating about 0.02 per unit of volatility. If you would invest 3,486 in Univar Inc on August 27, 2024 and sell it today you would earn a total of 107.00 from holding Univar Inc or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 25.49% |
| Values | Daily Returns |
Lsb Industries vs. Univar Inc
Performance |
| Timeline |
| Lsb Industries |
| Univar Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lsb Industries and Univar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsb Industries and Univar
The main advantage of trading using opposite Lsb Industries and Univar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsb Industries position performs unexpectedly, Univar 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 Univar will offset losses from the drop in Univar's long position.| Lsb Industries vs. Valhi Inc | Lsb Industries vs. Westlake Chemical Partners | Lsb Industries vs. Braskem SA Class | Lsb Industries vs. Dow Inc |
| Univar vs. Valhi Inc | Univar vs. Huntsman | Univar vs. Lsb Industries | Univar vs. Westlake Chemical Partners |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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