Correlation Between LBA and Uquid Coin

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

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

Diversification Opportunities for LBA and Uquid Coin

0.0

Correlation Coefficient

LBA  Uquid Coin

Pay attention - limited upside

The 3 months correlation between LBA and Uquid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LBA and Uquid Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uquid Coin and LBA 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 LBA are associated (or correlated) with Uquid Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uquid Coin has no effect on the direction of LBA i.e., LBA and Uquid Coin go up and down completely randomly.

Pair Corralation between LBA and Uquid Coin

Assuming the 90 days trading horizon LBA is expected to generate 2.65 times more return on investment than Uquid Coin. However, LBA is 2.65 times more volatile than Uquid Coin. It trades about 0.05 of its potential returns per unit of risk. Uquid Coin is currently generating about 0.05 per unit of risk. If you would invest  0.25  in LBA on January 25, 2024 and sell it today you would lose (0.20) from holding LBA or give up 79.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LBA  vs.  Uquid Coin

LBA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LBA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, LBA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Uquid Coin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uquid Coin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Uquid Coin shareholders.

Pair Trading with LBA and Uquid Coin

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

The idea behind LBA and Uquid Coin 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.