Correlation Between LGL and Ieh Corp

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

By analyzing existing cross correlation between LGL Group and Ieh Corp, you can compare the effects of market volatilities on LGL and Ieh Corp 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 Ieh Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGL and Ieh Corp.

Diversification Opportunities for LGL and Ieh Corp

-0.14

Correlation Coefficient

LGL  Ieh Corp

Good diversification

The 3 months correlation between LGL and Ieh is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding LGL Group and Ieh Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ieh Corp 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 Ieh Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ieh Corp has no effect on the direction of LGL i.e., LGL and Ieh Corp go up and down completely randomly.

Pair Corralation between LGL and Ieh Corp

Considering the 90-day investment horizon LGL Group is expected to generate 0.61 times more return on investment than Ieh Corp. However, LGL Group is 1.64 times less risky than Ieh Corp. It trades about 0.05 of its potential returns per unit of risk. Ieh Corp is currently generating about 0.01 per unit of risk. If you would invest  441.00  in LGL Group on November 29, 2024 and sell it today you would earn a total of  243.00  from holding LGL Group or generate 55.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

LGL Group  vs.  Ieh Corp

LGL Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LGL Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, LGL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ieh Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ieh Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with LGL and Ieh Corp

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

The idea behind LGL Group and Ieh Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.