Correlation Between Plexus Corp and LGL
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and LGL 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 Plexus Corp and LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and LGL Group, you can compare the effects of market volatilities on Plexus Corp and LGL 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 Plexus Corp with a short position of LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and LGL.
Diversification Opportunities for Plexus Corp and LGL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plexus and LGL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and Plexus Corp 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 Plexus Corp are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Plexus Corp i.e., Plexus Corp and LGL go up and down completely randomly.
Pair Corralation between Plexus Corp and LGL
Given the investment horizon of 90 days Plexus Corp is expected to under-perform the LGL. In addition to that, Plexus Corp is 1.16 times more volatile than LGL Group. It trades about -0.09 of its total potential returns per unit of risk. LGL Group is currently generating about 0.28 per unit of volatility. If you would invest 589.00 in LGL Group on October 26, 2024 and sell it today you would earn a total of 73.00 from holding LGL Group or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. LGL Group
Performance |
| Timeline |
| Plexus Corp |
| LGL Group |
Plexus Corp and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and LGL
The main advantage of trading using opposite Plexus Corp and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.| Plexus Corp vs. Rigetti Computing | Plexus Corp vs. IONQ WT | Plexus Corp vs. Arqit Quantum Warrants | Plexus Corp vs. QBTS WT |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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