Correlation Between LJIM and Unusual Whales

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

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

Diversification Opportunities for LJIM and Unusual Whales

0.21

Correlation Coefficient

LJIM  Unusual Whales

Modest diversification

The 3 months correlation between LJIM and Unusual is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding LJIM and Unusual Whales Subversive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unusual Whales Subversive and LJIM 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 LJIM are associated (or correlated) with Unusual Whales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unusual Whales Subversive has no effect on the direction of LJIM i.e., LJIM and Unusual Whales go up and down completely randomly.

Pair Corralation between LJIM and Unusual Whales

If you would invest  2,852  in LJIM on October 8, 2024 and sell it today you would earn a total of  0.00  from holding LJIM or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

LJIM  vs.  Unusual Whales Subversive

LJIM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LJIM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, LJIM is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Unusual Whales Subversive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unusual Whales Subversive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Unusual Whales is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LJIM and Unusual Whales

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

The idea behind LJIM and Unusual Whales Subversive 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.