Correlation Between LRAD and Badger Meter
Can any of the company-specific risk be diversified away by investing in both LRAD and Badger Meter 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 LRAD and Badger Meter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LRAD Corporation and Badger Meter, you can compare the effects of market volatilities on LRAD and Badger Meter 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 LRAD with a short position of Badger Meter. Check out your portfolio center. Please also check ongoing floating volatility patterns of LRAD and Badger Meter.
Diversification Opportunities for LRAD and Badger Meter
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LRAD and Badger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LRAD Corp. and Badger Meter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Meter and LRAD 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 LRAD Corporation are associated (or correlated) with Badger Meter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Meter has no effect on the direction of LRAD i.e., LRAD and Badger Meter go up and down completely randomly.
Pair Corralation between LRAD and Badger Meter
If you would invest 15,750 in Badger Meter on January 26, 2024 and sell it today you would earn a total of 2,564 from holding Badger Meter or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LRAD Corp. vs. Badger Meter
Performance |
| Timeline |
| LRAD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Badger Meter |
LRAD and Badger Meter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LRAD and Badger Meter
The main advantage of trading using opposite LRAD and Badger Meter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LRAD position performs unexpectedly, Badger Meter 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 Badger Meter will offset losses from the drop in Badger Meter's long position.The idea behind LRAD Corporation and Badger Meter 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.| Badger Meter vs. ESCO Technologies | Badger Meter vs. Mesa Laboratories | Badger Meter vs. Vishay Precision Group | Badger Meter vs. Sensata Technologies Holding |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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