Correlation Between TROOPS and LifeSpeak

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

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

Diversification Opportunities for TROOPS and LifeSpeak

-0.13

Correlation Coefficient

TROOPS  LifeSpeak

Good diversification

The 3 months correlation between TROOPS and LifeSpeak is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding TROOPS Inc and LifeSpeak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeSpeak and TROOPS 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 TROOPS Inc are associated (or correlated) with LifeSpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeSpeak has no effect on the direction of TROOPS i.e., TROOPS and LifeSpeak go up and down completely randomly.

Pair Corralation between TROOPS and LifeSpeak

Given the investment horizon of 90 days TROOPS Inc is expected to under-perform the LifeSpeak. In addition to that, TROOPS is 2.86 times more volatile than LifeSpeak. It trades about -0.02 of its total potential returns per unit of risk. LifeSpeak is currently generating about 0.05 per unit of volatility. If you would invest  27.00  in LifeSpeak on November 28, 2024 and sell it today you would earn a total of  2.00  from holding LifeSpeak or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

TROOPS Inc  vs.  LifeSpeak

TROOPS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TROOPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

LifeSpeak

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LifeSpeak are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, LifeSpeak may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with TROOPS and LifeSpeak

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

The idea behind TROOPS Inc and LifeSpeak 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.