Correlation Between 3M and Leone Asset
Can any of the company-specific risk be diversified away by investing in both 3M and Leone Asset 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 3M and Leone Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Leone Asset Management, you can compare the effects of market volatilities on 3M and Leone Asset 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 3M with a short position of Leone Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Leone Asset.
Diversification Opportunities for 3M and Leone Asset
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 3M and Leone is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Leone Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leone Asset Management and 3M 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 3M Company are associated (or correlated) with Leone Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leone Asset Management has no effect on the direction of 3M i.e., 3M and Leone Asset go up and down completely randomly.
Pair Corralation between 3M and Leone Asset
Considering the 90-day investment horizon 3M Company is expected to generate 0.08 times more return on investment than Leone Asset. However, 3M Company is 12.99 times less risky than Leone Asset. It trades about 0.16 of its potential returns per unit of risk. Leone Asset Management is currently generating about -0.22 per unit of risk. If you would invest 12,655 in 3M Company on September 2, 2024 and sell it today you would earn a total of 698.00 from holding 3M Company or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M Company vs. Leone Asset Management
Performance |
| Timeline |
| 3M Company |
| Leone Asset Management |
3M and Leone Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Leone Asset
The main advantage of trading using opposite 3M and Leone Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Leone Asset 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 Leone Asset will offset losses from the drop in Leone Asset's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Leone Asset vs. Honeywell International | Leone Asset vs. MDU Resources Group | Leone Asset vs. Compass Diversified Holdings | Leone Asset vs. Valmont 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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