Correlation Between LG Gerd and IncomeShares Apple

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Can any of the company-specific risk be diversified away by investing in both LG Gerd and IncomeShares Apple 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 LG Gerd and IncomeShares Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Gerd Kommer and IncomeShares Apple Options, you can compare the effects of market volatilities on LG Gerd and IncomeShares Apple 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 LG Gerd with a short position of IncomeShares Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Gerd and IncomeShares Apple.

Diversification Opportunities for LG Gerd and IncomeShares Apple

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between GERD and IncomeShares is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding LG Gerd Kommer and IncomeShares Apple Options in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IncomeShares Apple and LG Gerd 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 LG Gerd Kommer are associated (or correlated) with IncomeShares Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IncomeShares Apple has no effect on the direction of LG Gerd i.e., LG Gerd and IncomeShares Apple go up and down completely randomly.

Pair Corralation between LG Gerd and IncomeShares Apple

Assuming the 90 days trading horizon LG Gerd Kommer is expected to under-perform the IncomeShares Apple. But the etf apears to be less risky and, when comparing its historical volatility, LG Gerd Kommer is 1.07 times less risky than IncomeShares Apple. The etf trades about -0.11 of its potential returns per unit of risk. The IncomeShares Apple Options is currently generating about 0.82 of returns per unit of risk over similar time horizon. If you would invest  977.00  in IncomeShares Apple Options on September 28, 2024 and sell it today you would earn a total of  96.00  from holding IncomeShares Apple Options or generate 9.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

LG Gerd Kommer  vs.  IncomeShares Apple Options

 Performance 
       Timeline  
LG Gerd Kommer 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in LG Gerd Kommer are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, LG Gerd is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
IncomeShares Apple 

Risk-Adjusted Performance

54 of 100

 
Weak
 
Strong
Excellent
Compared to the overall equity markets, risk-adjusted returns on investments in IncomeShares Apple Options are ranked lower than 54 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, IncomeShares Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

LG Gerd and IncomeShares Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LG Gerd and IncomeShares Apple

The main advantage of trading using opposite LG Gerd and IncomeShares Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Gerd position performs unexpectedly, IncomeShares Apple 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 IncomeShares Apple will offset losses from the drop in IncomeShares Apple's long position.
The idea behind LG Gerd Kommer and IncomeShares Apple Options 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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