Correlation Between LUX ISLAND and ELITE MEAT

Can any of the company-specific risk be diversified away by investing in both LUX ISLAND and ELITE MEAT 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 LUX ISLAND and ELITE MEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LUX ISLAND RESORTS and ELITE MEAT PROCESSORS, you can compare the effects of market volatilities on LUX ISLAND and ELITE MEAT 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 LUX ISLAND with a short position of ELITE MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUX ISLAND and ELITE MEAT.

Diversification Opportunities for LUX ISLAND and ELITE MEAT

0.0

Correlation Coefficient

LUX ISLAND  ELITE MEAT

Pay attention - limited upside

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

Pair Corralation between LUX ISLAND and ELITE MEAT

If you would invest  185.00  in ELITE MEAT PROCESSORS on September 18, 2024 and sell it today you would earn a total of  0.00  from holding ELITE MEAT PROCESSORS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	15.87%
Values	Daily Returns

LUX ISLAND RESORTS  vs.  ELITE MEAT PROCESSORS

LUX ISLAND RESORTS

Risk-Adjusted Performance

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Very Weak

Over the last 90 days LUX ISLAND RESORTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

ELITE MEAT PROCESSORS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with LUX ISLAND and ELITE MEAT

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

The idea behind LUX ISLAND RESORTS and ELITE MEAT PROCESSORS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.