Correlation Between Turning Point and Ladybug Resource
Can any of the company-specific risk be diversified away by investing in both Turning Point and Ladybug Resource 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 Turning Point and Ladybug Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Ladybug Resource Group, you can compare the effects of market volatilities on Turning Point and Ladybug Resource 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 Turning Point with a short position of Ladybug Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Ladybug Resource.
Diversification Opportunities for Turning Point and Ladybug Resource
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Turning and Ladybug is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Ladybug Resource Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladybug Resource and Turning Point 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 Turning Point Brands are associated (or correlated) with Ladybug Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladybug Resource has no effect on the direction of Turning Point i.e., Turning Point and Ladybug Resource go up and down completely randomly.
Pair Corralation between Turning Point and Ladybug Resource
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.17 times more return on investment than Ladybug Resource. However, Turning Point Brands is 5.9 times less risky than Ladybug Resource. It trades about 0.56 of its potential returns per unit of risk. Ladybug Resource Group is currently generating about -0.19 per unit of risk. If you would invest 4,723 in Turning Point Brands on September 1, 2024 and sell it today you would earn a total of 1,467 from holding Turning Point Brands or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Turning Point Brands vs. Ladybug Resource Group
Performance |
| Timeline |
| Turning Point Brands |
| Ladybug Resource |
Turning Point and Ladybug Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Ladybug Resource
The main advantage of trading using opposite Turning Point and Ladybug Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, Ladybug Resource 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 Ladybug Resource will offset losses from the drop in Ladybug Resource's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Ladybug Resource vs. Altria Group | Ladybug Resource vs. British American Tobacco | Ladybug Resource vs. Universal | Ladybug Resource vs. Imperial Brands PLC |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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