Correlation Between LAZY Old and Limbach Holdings

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

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

Diversification Opportunities for LAZY Old and Limbach Holdings

-0.11

Correlation Coefficient

LAZY Old  Limbach Holdings

Good diversification

The 3 months correlation between LAZY and Limbach is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding LAZY Old and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings and LAZY Old 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 LAZY Old are associated (or correlated) with Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of LAZY Old i.e., LAZY Old and Limbach Holdings go up and down completely randomly.

Pair Corralation between LAZY Old and Limbach Holdings

If you would invest  9,688  in Limbach Holdings on October 12, 2024 and sell it today you would earn a total of  29.00  from holding Limbach Holdings or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

LAZY Old  vs.  Limbach Holdings

LAZY Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAZY Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, LAZY Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Limbach Holdings

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Limbach Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile primary indicators, Limbach Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LAZY Old and Limbach Holdings

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

The idea behind LAZY Old and Limbach Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.