Correlation Between TR Property and LBG Media
Can any of the company-specific risk be diversified away by investing in both TR Property and LBG Media 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 TR Property and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TR Property Investment and LBG Media PLC, you can compare the effects of market volatilities on TR Property and LBG Media 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 TR Property with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of TR Property and LBG Media.
Diversification Opportunities for TR Property and LBG Media
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRY and LBG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TR Property Investment and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and TR Property 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 TR Property Investment are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of TR Property i.e., TR Property and LBG Media go up and down completely randomly.
Pair Corralation between TR Property and LBG Media
Assuming the 90 days trading horizon TR Property is expected to generate 5.41 times less return on investment than LBG Media. But when comparing it to its historical volatility, TR Property Investment is 1.99 times less risky than LBG Media. It trades about 0.02 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,800 in LBG Media PLC on September 6, 2024 and sell it today you would earn a total of 5,350 from holding LBG Media PLC or generate 78.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TR Property Investment vs. LBG Media PLC
Performance |
Timeline |
TR Property Investment |
LBG Media PLC |
TR Property and LBG Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TR Property and LBG Media
The main advantage of trading using opposite TR Property and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TR Property position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.TR Property vs. SupplyMe Capital PLC | TR Property vs. Lloyds Banking Group | TR Property vs. Premier African Minerals | TR Property vs. SANTANDER UK 8 |
LBG Media vs. Check Point Software | LBG Media vs. Pets at Home | LBG Media vs. Cars Inc | LBG Media vs. Sunny Optical Technology |
Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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