Correlation Between NYSE Composite and LOBO EV

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

By analyzing existing cross correlation between NYSE Composite and LOBO EV TECHNOLOGIES, you can compare the effects of market volatilities on NYSE Composite and LOBO EV 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 NYSE Composite with a short position of LOBO EV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and LOBO EV.

Diversification Opportunities for NYSE Composite and LOBO EV

-0.2

Correlation Coefficient

NYSE Composite  LOBO EV

Good diversification

The 3 months correlation between NYSE and LOBO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and LOBO EV TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOBO EV TECHNOLOGIES and NYSE Composite 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 NYSE Composite are associated (or correlated) with LOBO EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOBO EV TECHNOLOGIES has no effect on the direction of NYSE Composite i.e., NYSE Composite and LOBO EV go up and down completely randomly.

Pair Corralation between NYSE Composite and LOBO EV

Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.17 times more return on investment than LOBO EV. However, NYSE Composite is 6.01 times less risky than LOBO EV. It trades about 0.02 of its potential returns per unit of risk. LOBO EV TECHNOLOGIES is currently generating about -0.16 per unit of risk. If you would invest  1,907,793  in NYSE Composite on December 29, 2024 and sell it today you would earn a total of  19,237  from holding NYSE Composite or generate 1.01% return on investment over 90 days.

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

NYSE Composite  vs.  LOBO EV TECHNOLOGIES

Pair Trading with NYSE Composite and LOBO EV

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

The idea behind NYSE Composite and LOBO EV TECHNOLOGIES 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 Transaction History module to view history of all your transactions and understand their impact on performance.