Correlation Between BWV and LMF Acquisition

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

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

Diversification Opportunities for BWV and LMF Acquisition

0.0

Correlation Coefficient

BWV  LMF Acquisition

Pay attention - limited upside

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

Pair Corralation between BWV and LMF Acquisition

If you would invest  209.00  in LMF Acquisition Opportunities on December 25, 2024 and sell it today you would earn a total of  12.00  from holding LMF Acquisition Opportunities or generate 5.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BWV  vs.  LMF Acquisition Opportunities

BWV

Risk-Adjusted Performance

Very Weak

Over the last 90 days BWV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BWV is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

LMF Acquisition Oppo

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LMF Acquisition Opportunities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, LMF Acquisition unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BWV and LMF Acquisition

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

The idea behind BWV and LMF Acquisition Opportunities 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.