Correlation Between Lightbridge Corp and Energy Focu

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

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

Diversification Opportunities for Lightbridge Corp and Energy Focu

0.03

Correlation Coefficient

Lightbridge Corp  Energy Focu

Significant diversification

The 3 months correlation between Lightbridge and Energy is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lightbridge Corp and Energy Focu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Focu and Lightbridge Corp 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 Lightbridge Corp are associated (or correlated) with Energy Focu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Focu has no effect on the direction of Lightbridge Corp i.e., Lightbridge Corp and Energy Focu go up and down completely randomly.

Pair Corralation between Lightbridge Corp and Energy Focu

Given the investment horizon of 90 days Lightbridge Corp is expected to generate 3.08 times more return on investment than Energy Focu. However, Lightbridge Corp is 3.08 times more volatile than Energy Focu. It trades about 0.12 of its potential returns per unit of risk. Energy Focu is currently generating about 0.04 per unit of risk. If you would invest  359.00  in Lightbridge Corp on October 15, 2024 and sell it today you would earn a total of  239.00  from holding Lightbridge Corp or generate 66.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lightbridge Corp  vs.  Energy Focu

Lightbridge Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lightbridge Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Lightbridge Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Energy Focu

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Focu are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Energy Focu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lightbridge Corp and Energy Focu

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

The idea behind Lightbridge Corp and Energy Focu 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.