Correlation Between LSI Industries and Inrad Optics
Can any of the company-specific risk be diversified away by investing in both LSI Industries and Inrad Optics 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 Inrad Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Industries and Inrad Optics, you can compare the effects of market volatilities on LSI Industries and Inrad Optics 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 Inrad Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Industries and Inrad Optics.
Diversification Opportunities for LSI Industries and Inrad Optics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LSI and Inrad is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding LSI Industries and Inrad Optics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inrad Optics 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 Inrad Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inrad Optics has no effect on the direction of LSI Industries i.e., LSI Industries and Inrad Optics go up and down completely randomly.
Pair Corralation between LSI Industries and Inrad Optics
If you would invest 1,942 in LSI Industries on November 1, 2024 and sell it today you would earn a total of 180.00 from holding LSI Industries or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
LSI Industries vs. Inrad Optics
Performance |
| Timeline |
| LSI Industries |
| Inrad Optics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LSI Industries and Inrad Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Industries and Inrad Optics
The main advantage of trading using opposite LSI Industries and Inrad Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Industries position performs unexpectedly, Inrad Optics 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 Inrad Optics will offset losses from the drop in Inrad Optics' long position.| LSI Industries vs. Plexus Corp | LSI Industries vs. OSI Systems | LSI Industries vs. CTS Corporation | LSI Industries vs. Benchmark Electronics |
| Inrad Optics vs. M tron Industries | Inrad Optics vs. Ieh Corp | Inrad Optics vs. Deswell Industries | Inrad Optics vs. LSI 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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