Correlation Between Foodnamoo and LB Investment

Can any of the company-specific risk be diversified away by investing in both Foodnamoo and LB Investment 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 Foodnamoo and LB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Foodnamoo and LB Investment, you can compare the effects of market volatilities on Foodnamoo and LB Investment 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 Foodnamoo with a short position of LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and LB Investment.

Diversification Opportunities for Foodnamoo and LB Investment

-0.11

Correlation Coefficient

Foodnamoo  LB Investment

Good diversification

The 3 months correlation between Foodnamoo and 309960 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment and Foodnamoo 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 Foodnamoo are associated (or correlated) with LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of Foodnamoo i.e., Foodnamoo and LB Investment go up and down completely randomly.

Pair Corralation between Foodnamoo and LB Investment

Assuming the 90 days trading horizon Foodnamoo is expected to under-perform the LB Investment. But the stock apears to be less risky and, when comparing its historical volatility, Foodnamoo is 2.08 times less risky than LB Investment. The stock trades about -0.08 of its potential returns per unit of risk. The LB Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  328,428  in LB Investment on December 1, 2024 and sell it today you would earn a total of  48,572  from holding LB Investment or generate 14.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Foodnamoo  vs.  LB Investment

Foodnamoo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foodnamoo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

LB Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LB Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LB Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foodnamoo and LB Investment

The main advantage of trading using opposite Foodnamoo and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.

The idea behind Foodnamoo and LB Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.