Correlation Between LPL Financial and Akamai Technologies,

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

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

Diversification Opportunities for LPL Financial and Akamai Technologies,

-0.23

Correlation Coefficient

LPL Financial  Akamai Technologies,

Very good diversification

The 3 months correlation between LPL and Akamai is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Akamai Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies, and LPL Financial 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 LPL Financial Holdings are associated (or correlated) with Akamai Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies, has no effect on the direction of LPL Financial i.e., LPL Financial and Akamai Technologies, go up and down completely randomly.

Pair Corralation between LPL Financial and Akamai Technologies,

Assuming the 90 days trading horizon LPL Financial Holdings is expected to generate 0.87 times more return on investment than Akamai Technologies,. However, LPL Financial Holdings is 1.16 times less risky than Akamai Technologies,. It trades about 0.29 of its potential returns per unit of risk. Akamai Technologies, is currently generating about -0.05 per unit of risk. If you would invest  8,323  in LPL Financial Holdings on October 25, 2024 and sell it today you would earn a total of  3,482  from holding LPL Financial Holdings or generate 41.84% return on investment over 90 days.

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

LPL Financial Holdings  vs.  Akamai Technologies,

LPL Financial Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LPL Financial Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LPL Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Akamai Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akamai Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with LPL Financial and Akamai Technologies,

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

The idea behind LPL Financial Holdings and Akamai Technologies, 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.