Correlation Between LANDSEA GREEN and Makita

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

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

Diversification Opportunities for LANDSEA GREEN and Makita

0.0

Correlation Coefficient

LANDSEA GREEN  Makita

Pay attention - limited upside

The 3 months correlation between LANDSEA and Makita is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT and Makita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makita and LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT are associated (or correlated) with Makita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makita has no effect on the direction of LANDSEA GREEN i.e., LANDSEA GREEN and Makita go up and down completely randomly.

Pair Corralation between LANDSEA GREEN and Makita

Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 13.2 times more return on investment than Makita. However, LANDSEA GREEN is 13.2 times more volatile than Makita. It trades about 0.07 of its potential returns per unit of risk. Makita is currently generating about 0.07 per unit of risk. If you would invest  1.60  in LANDSEA GREEN MANAGEMENT on October 24, 2024 and sell it today you would lose (1.50) from holding LANDSEA GREEN MANAGEMENT or give up 93.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

LANDSEA GREEN MANAGEMENT  vs.  Makita

LANDSEA GREEN MANAGEMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LANDSEA GREEN MANAGEMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LANDSEA GREEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Makita

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Makita are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Makita is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LANDSEA GREEN and Makita

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

The idea behind LANDSEA GREEN MANAGEMENT and Makita 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.