Correlation Between LGI and Change Financial

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Can any of the company-specific risk be diversified away by investing in both LGI and Change Financial 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 LGI and Change Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI and Change Financial Limited, you can compare the effects of market volatilities on LGI and Change Financial 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 LGI with a short position of Change Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI and Change Financial.

Diversification Opportunities for LGI and Change Financial

LGIChangeDiversified AwayLGIChangeDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between LGI and Change is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LGI and Change Financial Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Change Financial and LGI 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 LGI are associated (or correlated) with Change Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Change Financial has no effect on the direction of LGI i.e., LGI and Change Financial go up and down completely randomly.

Pair Corralation between LGI and Change Financial

If you would invest (100.00) in LGI on October 16, 2024 and sell it today you would earn a total of  100.00  from holding LGI or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

LGI  vs.  Change Financial Limited

 Performance 
JavaScript chart by amCharts 3.21.15NovDec -20-15-10-50510
JavaScript chart by amCharts 3.21.15LGI CCA
       Timeline  
LGI 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days LGI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, LGI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Change Financial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Change Financial Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.0550.060.0650.070.0750.08

LGI and Change Financial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15LGI CCA
       Returns  

Pair Trading with LGI and Change Financial

The main advantage of trading using opposite LGI and Change Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI position performs unexpectedly, Change Financial 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 Change Financial will offset losses from the drop in Change Financial's long position.
The idea behind LGI and Change Financial Limited 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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