Correlation Between LGL and AT S

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

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

Diversification Opportunities for LGL and AT S

0.04

Correlation Coefficient

LGL  AT S

Significant diversification

The 3 months correlation between LGL and ASAAF is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LGL Group and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and LGL 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 LGL Group are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of LGL i.e., LGL and AT S go up and down completely randomly.

Pair Corralation between LGL and AT S

Considering the 90-day investment horizon LGL Group is expected to generate 0.92 times more return on investment than AT S. However, LGL Group is 1.09 times less risky than AT S. It trades about 0.05 of its potential returns per unit of risk. AT S Austria is currently generating about -0.04 per unit of risk. If you would invest  405.00  in LGL Group on September 17, 2024 and sell it today you would earn a total of  211.00  from holding LGL Group or generate 52.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

LGL Group  vs.  AT S Austria

LGL Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LGL Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, LGL is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

AT S Austria

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AT S is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LGL and AT S

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

The idea behind LGL Group and AT S Austria 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.