Correlation Between REX American and Lhyfe SA
Can any of the company-specific risk be diversified away by investing in both REX American and Lhyfe SA 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 REX American and Lhyfe SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REX American Resources and Lhyfe SA, you can compare the effects of market volatilities on REX American and Lhyfe SA 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 REX American with a short position of Lhyfe SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX American and Lhyfe SA.
Diversification Opportunities for REX American and Lhyfe SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between REX and Lhyfe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding REX American Resources and Lhyfe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lhyfe SA and REX American 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 REX American Resources are associated (or correlated) with Lhyfe SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lhyfe SA has no effect on the direction of REX American i.e., REX American and Lhyfe SA go up and down completely randomly.
Pair Corralation between REX American and Lhyfe SA
If you would invest 472.00 in Lhyfe SA on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Lhyfe SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
REX American Resources vs. Lhyfe SA
Performance |
| Timeline |
| REX American Resources |
| Lhyfe SA |
REX American and Lhyfe SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REX American and Lhyfe SA
The main advantage of trading using opposite REX American and Lhyfe SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX American position performs unexpectedly, Lhyfe SA 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 Lhyfe SA will offset losses from the drop in Lhyfe SA's long position.| REX American vs. Innospec | REX American vs. H B Fuller | REX American vs. Quaker Chemical | REX American vs. Minerals Technologies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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