Correlation Between Light Wonder and Real Luck

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

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

Diversification Opportunities for Light Wonder and Real Luck

0.0

Correlation Coefficient

Light Wonder  Real Luck

Pay attention - limited upside

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

Pair Corralation between Light Wonder and Real Luck

If you would invest  8,603  in Light Wonder on December 27, 2024 and sell it today you would earn a total of  1,946  from holding Light Wonder or generate 22.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Light Wonder  vs.  Real Luck Group

Light Wonder

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Light Wonder are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Light Wonder showed solid returns over the last few months and may actually be approaching a breakup point.

Real Luck Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Luck Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Real Luck is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Light Wonder and Real Luck

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

The idea behind Light Wonder and Real Luck Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.