Correlation Between Telecoms Informatics and LDG Investment

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

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

Diversification Opportunities for Telecoms Informatics and LDG Investment

-0.21

Correlation Coefficient

Telecoms Informatics  LDG Investment

Very good diversification

The 3 months correlation between Telecoms and LDG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC and Telecoms Informatics 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 Telecoms Informatics JSC are associated (or correlated) with LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and LDG Investment go up and down completely randomly.

Pair Corralation between Telecoms Informatics and LDG Investment

Assuming the 90 days trading horizon Telecoms Informatics is expected to generate 6.32 times less return on investment than LDG Investment. But when comparing it to its historical volatility, Telecoms Informatics JSC is 1.33 times less risky than LDG Investment. It trades about 0.02 of its potential returns per unit of risk. LDG Investment JSC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  189,000  in LDG Investment JSC on December 27, 2024 and sell it today you would earn a total of  15,000  from holding LDG Investment JSC or generate 7.94% return on investment over 90 days.

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

Telecoms Informatics JSC  vs.  LDG Investment JSC

Telecoms Informatics JSC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telecoms Informatics JSC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Telecoms Informatics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

LDG Investment JSC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LDG Investment JSC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, LDG Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Telecoms Informatics and LDG Investment

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

The idea behind Telecoms Informatics JSC and LDG Investment JSC 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.