Correlation Between LZG International and Logiq

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

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

Diversification Opportunities for LZG International and Logiq

-0.07

Correlation Coefficient

LZG International  Logiq

Good diversification

The 3 months correlation between LZG and Logiq is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding LZG International and Logiq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logiq Inc and LZG International 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 LZG International are associated (or correlated) with Logiq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logiq Inc has no effect on the direction of LZG International i.e., LZG International and Logiq go up and down completely randomly.

Pair Corralation between LZG International and Logiq

Given the investment horizon of 90 days LZG International is expected to generate 1.73 times less return on investment than Logiq. But when comparing it to its historical volatility, LZG International is 1.46 times less risky than Logiq. It trades about 0.13 of its potential returns per unit of risk. Logiq Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.66  in Logiq Inc on December 27, 2024 and sell it today you would earn a total of  0.63  from holding Logiq Inc or generate 95.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

LZG International  vs.  Logiq Inc

LZG International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LZG International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, LZG International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Logiq Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logiq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward indicators, Logiq reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LZG International and Logiq

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

The idea behind LZG International and Logiq Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.