Correlation Between Life Banc and Global Dividend

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

Diversification Opportunities for Life Banc and Global Dividend

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Life and Global is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Life Banc Split and Global Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dividend Growth and Life Banc 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 Life Banc Split are associated (or correlated) with Global Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dividend Growth has no effect on the direction of Life Banc i.e., Life Banc and Global Dividend go up and down completely randomly.

Pair Corralation between Life Banc and Global Dividend

Assuming the 90 days trading horizon Life Banc is expected to generate 1.06 times less return on investment than Global Dividend. In addition to that, Life Banc is 1.44 times more volatile than Global Dividend Growth. It trades about 0.04 of its total potential returns per unit of risk. Global Dividend Growth is currently generating about 0.06 per unit of volatility. If you would invest  818.00  in Global Dividend Growth on July 7, 2024 and sell it today you would earn a total of  269.00  from holding Global Dividend Growth or generate 32.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Life Banc Split  vs.  Global Dividend Growth

 Performance 
       Timeline  
Life Banc Split 

Risk-Adjusted Performance

31 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Life Banc Split are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Life Banc displayed solid returns over the last few months and may actually be approaching a breakup point.
Global Dividend Growth 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Global Dividend Growth are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global Dividend may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Life Banc and Global Dividend Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Life Banc and Global Dividend

The main advantage of trading using opposite Life Banc and Global Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Banc position performs unexpectedly, Global Dividend 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 Global Dividend will offset losses from the drop in Global Dividend's long position.
The idea behind Life Banc Split and Global Dividend Growth 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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