Correlation Between Levinski Ofer and Lesico

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Can any of the company-specific risk be diversified away by investing in both Levinski Ofer 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 Levinski Ofer and Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Levinski Ofer and Lesico, you can compare the effects of market volatilities on Levinski Ofer 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 Levinski Ofer with a short position of Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levinski Ofer and Lesico.

Diversification Opportunities for Levinski Ofer and Lesico

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Levinski and Lesico is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Levinski Ofer and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and Levinski Ofer 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 Levinski Ofer 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 Levinski Ofer i.e., Levinski Ofer and Lesico go up and down completely randomly.

Pair Corralation between Levinski Ofer and Lesico

Assuming the 90 days trading horizon Levinski Ofer is expected to under-perform the Lesico. In addition to that, Levinski Ofer is 1.82 times more volatile than Lesico. It trades about -0.02 of its total potential returns per unit of risk. Lesico is currently generating about 0.02 per unit of volatility. If you would invest  31,941  in Lesico on January 20, 2024 and sell it today you would earn a total of  1,269  from holding Lesico or generate 3.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Levinski Ofer  vs.  Lesico

 Performance 
       Timeline  
Levinski Ofer 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Levinski Ofer are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Levinski Ofer sustained solid returns over the last few months and may actually be approaching a breakup point.
Lesico 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lesico are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lesico sustained solid returns over the last few months and may actually be approaching a breakup point.

Levinski Ofer and Lesico Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Levinski Ofer and Lesico

The main advantage of trading using opposite Levinski Ofer and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levinski Ofer 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.
The idea behind Levinski Ofer and Lesico 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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