Correlation Between Xp and Ladenburg Thalmann

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

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

Diversification Opportunities for Xp and Ladenburg Thalmann

-0.92

Correlation Coefficient

Xp  Ladenburg Thalmann

Pay attention - limited upside

The 3 months correlation between Xp and Ladenburg is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and Xp 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 Xp Inc are associated (or correlated) with Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Xp i.e., Xp and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between Xp and Ladenburg Thalmann

Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Ladenburg Thalmann. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 1.19 times less risky than Ladenburg Thalmann. The stock trades about -0.01 of its potential returns per unit of risk. The Ladenburg Thalmann Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,655  in Ladenburg Thalmann Financial on October 11, 2024 and sell it today you would earn a total of  55.00  from holding Ladenburg Thalmann Financial or generate 3.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	25.45%
Values	Daily Returns

Xp Inc  vs.  Ladenburg Thalmann Financial

Xp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ladenburg Thalmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Xp and Ladenburg Thalmann

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

The idea behind Xp Inc and Ladenburg Thalmann Financial 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.