Correlation Between Lite Access and ESE Entertainment

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

By analyzing existing cross correlation between Lite Access Technologies and ESE Entertainment, you can compare the effects of market volatilities on Lite Access and ESE Entertainment 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 Lite Access with a short position of ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lite Access and ESE Entertainment.

Diversification Opportunities for Lite Access and ESE Entertainment

0.0

Correlation Coefficient

Lite Access  ESE Entertainment

Pay attention - limited upside

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

Pair Corralation between Lite Access and ESE Entertainment

If you would invest  6.00  in ESE Entertainment on December 27, 2024 and sell it today you would lose (0.50) from holding ESE Entertainment or give up 8.33% of portfolio value over 90 days.

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

Lite Access Technologies  vs.  ESE Entertainment

Lite Access Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lite Access Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lite Access is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ESE Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ESE Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, ESE Entertainment is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lite Access and ESE Entertainment

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

The idea behind Lite Access Technologies and ESE Entertainment 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.