Correlation Between LBG Media and Lords Grp

Can any of the company-specific risk be diversified away by investing in both LBG Media and Lords Grp 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 LBG Media and Lords Grp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LBG Media PLC and Lords Grp Trading, you can compare the effects of market volatilities on LBG Media and Lords Grp 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 LBG Media with a short position of Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Lords Grp.

Diversification Opportunities for LBG Media and Lords Grp

0.58

Correlation Coefficient

LBG Media  Lords Grp

Very weak diversification

The 3 months correlation between LBG and Lords is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp Trading and LBG Media 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 LBG Media PLC are associated (or correlated) with Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of LBG Media i.e., LBG Media and Lords Grp go up and down completely randomly.

Pair Corralation between LBG Media and Lords Grp

Assuming the 90 days trading horizon LBG Media PLC is expected to generate 1.24 times more return on investment than Lords Grp. However, LBG Media is 1.24 times more volatile than Lords Grp Trading. It trades about 0.02 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.07 per unit of risk. If you would invest  12,400  in LBG Media PLC on September 22, 2024 and sell it today you would earn a total of  900.00  from holding LBG Media PLC or generate 7.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

LBG Media PLC  vs.  Lords Grp Trading

LBG Media PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LBG Media PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LBG Media is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lords Grp Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lords Grp Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with LBG Media and Lords Grp

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

The idea behind LBG Media PLC and Lords Grp Trading 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.