Correlation Between Tlou Energy and LBG Media
Can any of the company-specific risk be diversified away by investing in both Tlou Energy and LBG Media 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 Tlou Energy and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tlou Energy and LBG Media PLC, you can compare the effects of market volatilities on Tlou Energy and LBG Media 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 Tlou Energy with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tlou Energy and LBG Media.
Diversification Opportunities for Tlou Energy and LBG Media
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tlou and LBG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tlou Energy and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Tlou Energy 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 Tlou Energy are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Tlou Energy i.e., Tlou Energy and LBG Media go up and down completely randomly.
Pair Corralation between Tlou Energy and LBG Media
Assuming the 90 days trading horizon Tlou Energy is expected to under-perform the LBG Media. But the stock apears to be less risky and, when comparing its historical volatility, Tlou Energy is 1.59 times less risky than LBG Media. The stock trades about -0.42 of its potential returns per unit of risk. The LBG Media PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12,600 in LBG Media PLC on September 25, 2024 and sell it today you would earn a total of 400.00 from holding LBG Media PLC or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tlou Energy vs. LBG Media PLC
Performance |
| Timeline |
| Tlou Energy |
| LBG Media PLC |
Tlou Energy and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tlou Energy and LBG Media
The main advantage of trading using opposite Tlou Energy and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tlou Energy position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Tlou Energy vs. Zoom Video Communications | Tlou Energy vs. Enbridge | Tlou Energy vs. Endo International PLC | Tlou Energy vs. XLMedia PLC |
| LBG Media vs. Tlou Energy | LBG Media vs. Rockfire Resources plc | LBG Media vs. Ikigai Ventures | LBG Media vs. Falcon Oil Gas |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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