Correlation Between LQwD FinTech and True North

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

By analyzing existing cross correlation between LQwD FinTech Corp and True North Commercial, you can compare the effects of market volatilities on LQwD FinTech and True North 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 LQwD FinTech with a short position of True North. Check out your portfolio center. Please also check ongoing floating volatility patterns of LQwD FinTech and True North.

Diversification Opportunities for LQwD FinTech and True North

0.3

Correlation Coefficient

LQwD FinTech  True North

Weak diversification

The 3 months correlation between LQwD and True is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding LQwD FinTech Corp and True North Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True North Commercial and LQwD FinTech 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 LQwD FinTech Corp are associated (or correlated) with True North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True North Commercial has no effect on the direction of LQwD FinTech i.e., LQwD FinTech and True North go up and down completely randomly.

Pair Corralation between LQwD FinTech and True North

Assuming the 90 days trading horizon LQwD FinTech Corp is expected to under-perform the True North. In addition to that, LQwD FinTech is 1.9 times more volatile than True North Commercial. It trades about -0.09 of its total potential returns per unit of risk. True North Commercial is currently generating about 0.02 per unit of volatility. If you would invest  991.00  in True North Commercial on December 29, 2024 and sell it today you would earn a total of  3.00  from holding True North Commercial or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

LQwD FinTech Corp  vs.  True North Commercial

LQwD FinTech Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days LQwD FinTech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

True North Commercial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in True North Commercial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, True North is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LQwD FinTech and True North

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

The idea behind LQwD FinTech Corp and True North Commercial 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.