This module allows you to analyze existing cross correlation between Baldwin Lyons and Loews Corporation. You can compare the effects of market volatilities on Baldwin Lyons and Loews 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 Baldwin Lyons with a short position of Loews. See also your portfolio center. Please also check ongoing floating volatility patterns of Baldwin Lyons and Loews.
Assuming 30 trading days horizon, Baldwin Lyons is expected to generate 1.08 times more return on investment than Loews. However, Baldwin Lyons is 1.08 times more volatile than Loews Corporation. It trades about 0.05 of its potential returns per unit of risk. Loews Corporation is currently generating about 0.04 per unit of risk. If you would invest 2,300 in Baldwin Lyons on March 26, 2018 and sell it today you would earn a total of 55.00 from holding Baldwin Lyons or generate 2.39% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Baldwin Lyons Inc and Loews Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Loews and Baldwin Lyons 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 Baldwin Lyons are associated (or correlated) with Loews. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews has no effect on the direction of Baldwin Lyons i.e. Baldwin Lyons and Loews go up and down completely randomly.
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