Correlation Between Ideanomics and Lindsay

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

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

Diversification Opportunities for Ideanomics and Lindsay

-0.01

Correlation Coefficient

Ideanomics  Lindsay

Good diversification

The 3 months correlation between Ideanomics and Lindsay is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay and Ideanomics 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 Ideanomics are associated (or correlated) with Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Ideanomics i.e., Ideanomics and Lindsay go up and down completely randomly.

Pair Corralation between Ideanomics and Lindsay

Given the investment horizon of 90 days Ideanomics is expected to generate 28.45 times more return on investment than Lindsay. However, Ideanomics is 28.45 times more volatile than Lindsay. It trades about 0.17 of its potential returns per unit of risk. Lindsay is currently generating about 0.01 per unit of risk. If you would invest  10.00  in Ideanomics on September 26, 2024 and sell it today you would lose (9.43) from holding Ideanomics or give up 94.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ideanomics  vs.  Lindsay

Ideanomics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideanomics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Lindsay

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Lindsay has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Lindsay is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ideanomics and Lindsay

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

The idea behind Ideanomics and Lindsay 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.