Correlation Between 512807AU2 and Safety Shot

Can any of the company-specific risk be diversified away by investing in both 512807AU2 and Safety Shot 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 512807AU2 and Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAM RESEARCH PORATION and Safety Shot, you can compare the effects of market volatilities on 512807AU2 and Safety Shot 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 512807AU2 with a short position of Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of 512807AU2 and Safety Shot.

Diversification Opportunities for 512807AU2 and Safety Shot

-0.34

Correlation Coefficient

512807AU2  Safety Shot

Very good diversification

The 3 months correlation between 512807AU2 and Safety is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding LAM RESEARCH PORATION and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot and 512807AU2 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 LAM RESEARCH PORATION are associated (or correlated) with Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of 512807AU2 i.e., 512807AU2 and Safety Shot go up and down completely randomly.

Pair Corralation between 512807AU2 and Safety Shot

Assuming the 90 days trading horizon LAM RESEARCH PORATION is expected to generate 0.08 times more return on investment than Safety Shot. However, LAM RESEARCH PORATION is 11.95 times less risky than Safety Shot. It trades about 0.02 of its potential returns per unit of risk. Safety Shot is currently generating about -0.13 per unit of risk. If you would invest  9,734  in LAM RESEARCH PORATION on December 25, 2024 and sell it today you would earn a total of  46.00  from holding LAM RESEARCH PORATION or generate 0.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

LAM RESEARCH PORATION  vs.  Safety Shot

LAM RESEARCH PORATION

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LAM RESEARCH PORATION are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 512807AU2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Safety Shot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 512807AU2 and Safety Shot

The main advantage of trading using opposite 512807AU2 and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 512807AU2 position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.

The idea behind LAM RESEARCH PORATION and Safety Shot 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.