Correlation Between Twin Vee and LCI Industries
Can any of the company-specific risk be diversified away by investing in both Twin Vee and LCI Industries 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 Twin Vee and LCI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twin Vee Powercats and LCI Industries, you can compare the effects of market volatilities on Twin Vee and LCI Industries 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 Twin Vee with a short position of LCI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twin Vee and LCI Industries.
Diversification Opportunities for Twin Vee and LCI Industries
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Twin and LCI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Twin Vee Powercats and LCI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LCI Industries and Twin Vee 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 Twin Vee Powercats are associated (or correlated) with LCI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LCI Industries has no effect on the direction of Twin Vee i.e., Twin Vee and LCI Industries go up and down completely randomly.
Pair Corralation between Twin Vee and LCI Industries
Given the investment horizon of 90 days Twin Vee Powercats is expected to generate 4.68 times more return on investment than LCI Industries. However, Twin Vee is 4.68 times more volatile than LCI Industries. It trades about 0.06 of its potential returns per unit of risk. LCI Industries is currently generating about 0.13 per unit of risk. If you would invest 42.00 in Twin Vee Powercats on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Twin Vee Powercats or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Twin Vee Powercats vs. LCI Industries
Performance |
| Timeline |
| Twin Vee Powercats |
| LCI Industries |
Twin Vee and LCI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twin Vee and LCI Industries
The main advantage of trading using opposite Twin Vee and LCI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twin Vee position performs unexpectedly, LCI Industries 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 LCI Industries will offset losses from the drop in LCI Industries' long position.| Twin Vee vs. Vision Marine Technologies | Twin Vee vs. EZGO Technologies | Twin Vee vs. LCI Industries | Twin Vee vs. Curtiss Motorcycles |
| LCI Industries vs. MCBC Holdings | LCI Industries vs. BRP Inc | LCI Industries vs. Malibu Boats | LCI Industries vs. Winnebago 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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