Correlation Between ESE Entertainment and Lite Access

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

By analyzing existing cross correlation between ESE Entertainment and Lite Access Technologies, you can compare the effects of market volatilities on ESE Entertainment and Lite Access 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 ESE Entertainment with a short position of Lite Access. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESE Entertainment and Lite Access.

Diversification Opportunities for ESE Entertainment and Lite Access

0.0

Correlation Coefficient

ESE Entertainment  Lite Access

Pay attention - limited upside

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

Pair Corralation between ESE Entertainment and Lite Access

If you would invest  9.50  in Lite Access Technologies on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Lite Access Technologies or generate 0.0% return on investment over 90 days.

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

ESE Entertainment  vs.  Lite Access Technologies

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESE Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Lite Access Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lite Access Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lite Access is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ESE Entertainment and Lite Access

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

The idea behind ESE Entertainment and Lite Access Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.