Correlation Between Usio and Lydall

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

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

Diversification Opportunities for Usio and Lydall

0.0

Correlation Coefficient

Usio  Lydall

Pay attention - limited upside

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

Pair Corralation between Usio and Lydall

If you would invest (100.00) in Lydall Inc on March 4, 2024 and sell it today you would earn a total of  100.00  from holding Lydall Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Usio Inc  vs.  Lydall Inc

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Lydall Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lydall Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Lydall is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Usio and Lydall

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

The idea behind Usio Inc and Lydall Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.