Correlation Between LSI Industries and Ieh Corp
Can any of the company-specific risk be diversified away by investing in both LSI Industries and Ieh Corp 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 Industries and Ieh Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Industries and Ieh Corp, you can compare the effects of market volatilities on LSI Industries and Ieh Corp 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 Industries with a short position of Ieh Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Industries and Ieh Corp.
Diversification Opportunities for LSI Industries and Ieh Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LSI and Ieh is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding LSI Industries and Ieh Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ieh Corp and LSI 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 LSI Industries are associated (or correlated) with Ieh Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ieh Corp has no effect on the direction of LSI Industries i.e., LSI Industries and Ieh Corp go up and down completely randomly.
Pair Corralation between LSI Industries and Ieh Corp
Given the investment horizon of 90 days LSI Industries is expected to generate 0.46 times more return on investment than Ieh Corp. However, LSI Industries is 2.16 times less risky than Ieh Corp. It trades about 0.44 of its potential returns per unit of risk. Ieh Corp is currently generating about -0.28 per unit of risk. If you would invest 1,662 in LSI Industries on August 28, 2024 and sell it today you would earn a total of 413.00 from holding LSI Industries or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LSI Industries vs. Ieh Corp
Performance |
| Timeline |
| LSI Industries |
| Ieh Corp |
LSI Industries and Ieh Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Industries and Ieh Corp
The main advantage of trading using opposite LSI Industries and Ieh Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Industries position performs unexpectedly, Ieh Corp 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 Ieh Corp will offset losses from the drop in Ieh Corp's long position.| LSI Industries vs. Plexus Corp | LSI Industries vs. OSI Systems | LSI Industries vs. CTS Corporation | LSI Industries vs. Benchmark Electronics |
| Ieh Corp vs. LGL Group | Ieh Corp vs. Deswell Industries | Ieh Corp vs. M tron Industries | Ieh Corp vs. Micropac Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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