Correlation Between Concepcion Industrial and LT

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

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

Diversification Opportunities for Concepcion Industrial and LT

0.0

Correlation Coefficient

Concepcion Industrial  LT

Pay attention - limited upside

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

Pair Corralation between Concepcion Industrial and LT

If you would invest (100.00) in LT Group on October 24, 2024 and sell it today you would earn a total of  100.00  from holding LT Group or generate -100.0% return on investment over 90 days.

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

Concepcion Industrial Corp  vs.  LT Group

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

LT Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LT Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Concepcion Industrial and LT

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

The idea behind Concepcion Industrial Corp and LT Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.