Correlation Between City View and Levitee Labs

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

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

Diversification Opportunities for City View and Levitee Labs

0.0

Correlation Coefficient

City View  Levitee Labs

Pay attention - limited upside

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

Pair Corralation between City View and Levitee Labs

If you would invest  0.26  in City View Green on December 20, 2024 and sell it today you would earn a total of  0.30  from holding City View Green or generate 115.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

City View Green  vs.  Levitee Labs

City View Green

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in City View Green are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, City View reported solid returns over the last few months and may actually be approaching a breakup point.

Levitee Labs

Risk-Adjusted Performance

Very Weak

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

Pair Trading with City View and Levitee Labs

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

The idea behind City View Green and Levitee Labs 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.