Correlation Between Lery Seafood and TRAVEL LEISURE

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

By analyzing existing cross correlation between Lery Seafood Group and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Lery Seafood and TRAVEL LEISURE 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 Lery Seafood with a short position of TRAVEL LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and TRAVEL LEISURE.

Diversification Opportunities for Lery Seafood and TRAVEL LEISURE

0.0

Correlation Coefficient

Lery Seafood  TRAVEL LEISURE

Pay attention - limited upside

The 3 months correlation between Lery and TRAVEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and Lery Seafood 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 Lery Seafood Group are associated (or correlated) with TRAVEL LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Lery Seafood i.e., Lery Seafood and TRAVEL LEISURE go up and down completely randomly.

Pair Corralation between Lery Seafood and TRAVEL LEISURE

Assuming the 90 days horizon Lery Seafood is expected to generate 11.1 times less return on investment than TRAVEL LEISURE. In addition to that, Lery Seafood is 1.22 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.01 of its total potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.18 per unit of volatility. If you would invest  4,317  in TRAVEL LEISURE DL 01 on October 25, 2024 and sell it today you would earn a total of  683.00  from holding TRAVEL LEISURE DL 01 or generate 15.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lery Seafood Group  vs.  TRAVEL LEISURE DL 01

Lery Seafood Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lery Seafood is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

TRAVEL LEISURE DL

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAVEL LEISURE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lery Seafood and TRAVEL LEISURE

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

The idea behind Lery Seafood Group and TRAVEL LEISURE DL 01 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.