Correlation Between Lysander Slater and Dynamic Active

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

By analyzing existing cross correlation between Lysander Slater Preferred Share and Dynamic Active Global, you can compare the effects of market volatilities on Lysander Slater and Dynamic Active 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 Lysander Slater with a short position of Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysander Slater and Dynamic Active.

Diversification Opportunities for Lysander Slater and Dynamic Active

0.72

Correlation Coefficient

Lysander Slater  Dynamic Active

Poor diversification

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

Pair Corralation between Lysander Slater and Dynamic Active

Assuming the 90 days horizon Lysander Slater Preferred Share is expected to generate 0.28 times more return on investment than Dynamic Active. However, Lysander Slater Preferred Share is 3.59 times less risky than Dynamic Active. It trades about 0.41 of its potential returns per unit of risk. Dynamic Active Global is currently generating about 0.04 per unit of risk. If you would invest  965.00  in Lysander Slater Preferred Share on October 9, 2024 and sell it today you would earn a total of  28.00  from holding Lysander Slater Preferred Share or generate 2.9% return on investment over 90 days.

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

Lysander Slater Preferred Shar  vs.  Dynamic Active Global

Lysander Slater Pref

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lysander Slater Preferred Share are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lysander Slater is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Dynamic Active Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Active Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Dynamic Active may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lysander Slater and Dynamic Active

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

The idea behind Lysander Slater Preferred Share and Dynamic Active Global 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.