Correlation Between Mid Atlantic and Lep Technology

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Can any of the company-specific risk be diversified away by investing in both Mid Atlantic and Lep Technology 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 Mid Atlantic and Lep Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Atlantic Home Health and Lep Technology, you can compare the effects of market volatilities on Mid Atlantic and Lep Technology 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 Mid Atlantic with a short position of Lep Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Atlantic and Lep Technology.

Diversification Opportunities for Mid Atlantic and Lep Technology

1.0
  Correlation Coefficient

No risk reduction

The 3 months correlation between Mid and Lep is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and Lep Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lep Technology and Mid Atlantic 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 Mid Atlantic Home Health are associated (or correlated) with Lep Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lep Technology has no effect on the direction of Mid Atlantic i.e., Mid Atlantic and Lep Technology go up and down completely randomly.

Pair Corralation between Mid Atlantic and Lep Technology

If you would invest  0.01  in Lep Technology on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Lep Technology or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.44%
ValuesDaily Returns

Mid Atlantic Home Health  vs.  Lep Technology

 Performance 
       Timeline  
Mid Atlantic Home 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid Atlantic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Lep Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lep Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Lep Technology is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mid Atlantic and Lep Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mid Atlantic and Lep Technology

The main advantage of trading using opposite Mid Atlantic and Lep Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Atlantic position performs unexpectedly, Lep Technology 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 Lep Technology will offset losses from the drop in Lep Technology's long position.
The idea behind Mid Atlantic Home Health and Lep Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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