Correlation Between Cps Technologies and LGL

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

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

Diversification Opportunities for Cps Technologies and LGL

0.48

Correlation Coefficient

Cps Technologies  LGL

Very weak diversification

The 3 months correlation between Cps and LGL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cps Technologies and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and Cps Technologies 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 Cps Technologies are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Cps Technologies i.e., Cps Technologies and LGL go up and down completely randomly.

Pair Corralation between Cps Technologies and LGL

Given the investment horizon of 90 days Cps Technologies is expected to generate 1.78 times less return on investment than LGL. In addition to that, Cps Technologies is 1.08 times more volatile than LGL Group. It trades about 0.03 of its total potential returns per unit of risk. LGL Group is currently generating about 0.06 per unit of volatility. If you would invest  589.00  in LGL Group on December 26, 2024 and sell it today you would earn a total of  61.00  from holding LGL Group or generate 10.36% return on investment over 90 days.

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

Cps Technologies  vs.  LGL Group

Cps Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cps Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Cps Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

LGL Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LGL Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, LGL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cps Technologies and LGL

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

The idea behind Cps Technologies and LGL 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..