Correlation Between GoPro and Lesico
Can any of the company-specific risk be diversified away by investing in both GoPro and Lesico 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 GoPro and Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and Lesico, you can compare the effects of market volatilities on GoPro and Lesico 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 GoPro with a short position of Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and Lesico.
Diversification Opportunities for GoPro and Lesico
Pay attention - limited upside
The 3 months correlation between GoPro and Lesico is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and GoPro 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 GoPro Inc are associated (or correlated) with Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of GoPro i.e., GoPro and Lesico go up and down completely randomly.
Pair Corralation between GoPro and Lesico
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the Lesico. In addition to that, GoPro is 1.0 times more volatile than Lesico. It trades about -0.41 of its total potential returns per unit of risk. Lesico is currently generating about 0.33 per unit of volatility. If you would invest 29,890 in Lesico on January 26, 2024 and sell it today you would earn a total of 3,980 from holding Lesico or generate 13.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 76.19% |
Values | Daily Returns |
GoPro Inc vs. Lesico
Performance |
Timeline |
GoPro Inc |
Lesico |
GoPro and Lesico Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GoPro and Lesico
The main advantage of trading using opposite GoPro and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro position performs unexpectedly, Lesico 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 Lesico will offset losses from the drop in Lesico's long position.GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Vizio Holding Corp | GoPro vs. Universal Electronics |
Lesico vs. Alony Hetz Properties | Lesico vs. Melisron | Lesico vs. Shufersal | Lesico vs. Israel Discount Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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