Correlation Between Direct Selling and Ladenburg Thalmann

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

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

Diversification Opportunities for Direct Selling and Ladenburg Thalmann

0.77

Correlation Coefficient

Direct Selling  Ladenburg Thalmann

Poor diversification

The 3 months correlation between Direct and Ladenburg is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Direct Selling Acquisition and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and Direct Selling 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 Direct Selling Acquisition 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 Direct Selling i.e., Direct Selling and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between Direct Selling and Ladenburg Thalmann

Given the investment horizon of 90 days Direct Selling is expected to generate 1.32 times less return on investment than Ladenburg Thalmann. But when comparing it to its historical volatility, Direct Selling Acquisition is 19.9 times less risky than Ladenburg Thalmann. It trades about 0.22 of its potential returns per unit of risk. Ladenburg Thalmann Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,750  in Ladenburg Thalmann Financial on September 18, 2024 and sell it today you would lose (11.00) from holding Ladenburg Thalmann Financial or give up 0.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.3%
Values	Daily Returns

Direct Selling Acquisition  vs.  Ladenburg Thalmann Financial

Direct Selling Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Direct Selling Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Direct Selling is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the 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 quite persistent basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Direct Selling and Ladenburg Thalmann

The main advantage of trading using opposite Direct Selling and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Selling 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 Direct Selling Acquisition 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..