Correlation Between Igoria Trade and LPP SA

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

By analyzing existing cross correlation between Igoria Trade SA and LPP SA, you can compare the effects of market volatilities on Igoria Trade and LPP SA 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 Igoria Trade with a short position of LPP SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Igoria Trade and LPP SA.

Diversification Opportunities for Igoria Trade and LPP SA

0.1

Correlation Coefficient

Igoria Trade  LPP SA

Average diversification

The 3 months correlation between Igoria and LPP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Igoria Trade SA and LPP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPP SA and Igoria Trade 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 Igoria Trade SA are associated (or correlated) with LPP SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPP SA has no effect on the direction of Igoria Trade i.e., Igoria Trade and LPP SA go up and down completely randomly.

Pair Corralation between Igoria Trade and LPP SA

Assuming the 90 days trading horizon Igoria Trade is expected to generate 1.81 times less return on investment than LPP SA. In addition to that, Igoria Trade is 1.64 times more volatile than LPP SA. It trades about 0.02 of its total potential returns per unit of risk. LPP SA is currently generating about 0.05 per unit of volatility. If you would invest  1,480,938  in LPP SA on September 3, 2024 and sell it today you would earn a total of  85,062  from holding LPP SA or generate 5.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Igoria Trade SA  vs.  LPP SA

Igoria Trade SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Igoria Trade SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Igoria Trade is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

LPP SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LPP SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, LPP SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Igoria Trade and LPP SA

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

The idea behind Igoria Trade SA and LPP SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.