Correlation Between LAMF Global and DP Cap

Can any of the company-specific risk be diversified away by investing in both LAMF Global and DP Cap 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 LAMF Global and DP Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAMF Global Ventures and DP Cap Acquisition, you can compare the effects of market volatilities on LAMF Global and DP Cap 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 LAMF Global with a short position of DP Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAMF Global and DP Cap.

Diversification Opportunities for LAMF Global and DP Cap

0.02

Correlation Coefficient

LAMF Global  DP Cap

Significant diversification

The 3 months correlation between LAMF and DPCS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding LAMF Global Ventures and DP Cap Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DP Cap Acquisition and LAMF Global 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 LAMF Global Ventures are associated (or correlated) with DP Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DP Cap Acquisition has no effect on the direction of LAMF Global i.e., LAMF Global and DP Cap go up and down completely randomly.

Pair Corralation between LAMF Global and DP Cap

If you would invest  1,260  in DP Cap Acquisition on September 28, 2024 and sell it today you would earn a total of  0.00  from holding DP Cap Acquisition or generate 0.0% return on investment over 90 days.

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

LAMF Global Ventures  vs.  DP Cap Acquisition

LAMF Global Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAMF Global Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, LAMF Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DP Cap Acquisition

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days DP Cap Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak fundamental indicators, DP Cap unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LAMF Global and DP Cap

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

The idea behind LAMF Global Ventures and DP Cap Acquisition 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .