Correlation Between Unusual Whales and LJIM

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

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

Diversification Opportunities for Unusual Whales and LJIM

0.72

Correlation Coefficient

Unusual Whales  LJIM

Poor diversification

The 3 months correlation between Unusual and LJIM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Unusual Whales Subversive and LJIM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LJIM and Unusual Whales 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 Unusual Whales Subversive are associated (or correlated) with LJIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LJIM has no effect on the direction of Unusual Whales i.e., Unusual Whales and LJIM go up and down completely randomly.

Pair Corralation between Unusual Whales and LJIM

If you would invest  2,852  in LJIM on September 30, 2024 and sell it today you would earn a total of  0.00  from holding LJIM or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Unusual Whales Subversive  vs.  LJIM

Unusual Whales Subversive

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unusual Whales Subversive are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Unusual Whales is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LJIM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LJIM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, LJIM is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Unusual Whales and LJIM

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

The idea behind Unusual Whales Subversive and LJIM 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.