Correlation Between Roku and Lingerie Fighting

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

By analyzing existing cross correlation between Roku Inc and Lingerie Fighting Championships, you can compare the effects of market volatilities on Roku and Lingerie Fighting 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 Roku with a short position of Lingerie Fighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Lingerie Fighting.

Diversification Opportunities for Roku and Lingerie Fighting

0.46

Correlation Coefficient

Roku  Lingerie Fighting

Very weak diversification

The 3 months correlation between Roku and Lingerie is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Lingerie Fighting Championship in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingerie Fighting and Roku 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 Roku Inc are associated (or correlated) with Lingerie Fighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingerie Fighting has no effect on the direction of Roku i.e., Roku and Lingerie Fighting go up and down completely randomly.

Pair Corralation between Roku and Lingerie Fighting

Given the investment horizon of 90 days Roku is expected to generate 29.22 times less return on investment than Lingerie Fighting. But when comparing it to its historical volatility, Roku Inc is 9.04 times less risky than Lingerie Fighting. It trades about 0.05 of its potential returns per unit of risk. Lingerie Fighting Championships is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Lingerie Fighting Championships on September 23, 2024 and sell it today you would earn a total of  0.01  from holding Lingerie Fighting Championships or generate 100.0% return on investment over 90 days.

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

Roku Inc  vs.  Lingerie Fighting Championship

Roku Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Roku Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Roku unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lingerie Fighting

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lingerie Fighting Championships are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Lingerie Fighting showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roku and Lingerie Fighting

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

The idea behind Roku Inc and Lingerie Fighting Championships 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.