Correlation Between Hubbell and Lightbridge Corp

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

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

Diversification Opportunities for Hubbell and Lightbridge Corp

0.61

Correlation Coefficient

Hubbell  Lightbridge Corp

Poor diversification

The 3 months correlation between Hubbell and Lightbridge is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and Lightbridge Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightbridge Corp and Hubbell 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 Hubbell are associated (or correlated) with Lightbridge Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightbridge Corp has no effect on the direction of Hubbell i.e., Hubbell and Lightbridge Corp go up and down completely randomly.

Pair Corralation between Hubbell and Lightbridge Corp

Given the investment horizon of 90 days Hubbell is expected to generate 7.3 times less return on investment than Lightbridge Corp. But when comparing it to its historical volatility, Hubbell is 7.99 times less risky than Lightbridge Corp. It trades about 0.19 of its potential returns per unit of risk. Lightbridge Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Lightbridge Corp on September 2, 2024 and sell it today you would earn a total of  414.00  from holding Lightbridge Corp or generate 172.5% return on investment over 90 days.

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

Hubbell  vs.  Lightbridge Corp

Hubbell

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hubbell are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Hubbell sustained solid returns over the last few months and may actually be approaching a breakup point.

Lightbridge Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lightbridge Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Lightbridge Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hubbell and Lightbridge Corp

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

The idea behind Hubbell and Lightbridge Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..