Correlation Between Lithia Motors and Deltagen
Can any of the company-specific risk be diversified away by investing in both Lithia Motors and Deltagen 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 Lithia Motors and Deltagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithia Motors and Deltagen, you can compare the effects of market volatilities on Lithia Motors and Deltagen 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 Lithia Motors with a short position of Deltagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithia Motors and Deltagen.
Diversification Opportunities for Lithia Motors and Deltagen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lithia and Deltagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lithia Motors and Deltagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltagen and Lithia Motors 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 Lithia Motors are associated (or correlated) with Deltagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltagen has no effect on the direction of Lithia Motors i.e., Lithia Motors and Deltagen go up and down completely randomly.
Pair Corralation between Lithia Motors and Deltagen
If you would invest 0.01 in Deltagen on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Deltagen or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
Lithia Motors vs. Deltagen
Performance |
Timeline |
Lithia Motors |
Deltagen |
Lithia Motors and Deltagen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lithia Motors and Deltagen
The main advantage of trading using opposite Lithia Motors and Deltagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithia Motors position performs unexpectedly, Deltagen 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 Deltagen will offset losses from the drop in Deltagen's long position.Lithia Motors vs. Sonic Automotive | Lithia Motors vs. AutoNation | Lithia Motors vs. Asbury Automotive Group | Lithia Motors vs. Penske Automotive Group |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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