Correlation Between Lmp Automotive and Bancor Network

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

Diversification Opportunities for Lmp Automotive and Bancor Network

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Lmp Automotive and Bancor is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lmp Automotive Holdings and Bancor Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancor Network Token and Lmp Automotive 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 Lmp Automotive Holdings are associated (or correlated) with Bancor Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancor Network Token has no effect on the direction of Lmp Automotive i.e., Lmp Automotive and Bancor Network go up and down completely randomly.

Pair Corralation between Lmp Automotive and Bancor Network

Given the investment horizon of 90 days Lmp Automotive Holdings is expected to generate 0.93 times more return on investment than Bancor Network. However, Lmp Automotive Holdings is 1.07 times less risky than Bancor Network. It trades about -0.02 of its potential returns per unit of risk. Bancor Network Token is currently generating about -0.07 per unit of risk. If you would invest  930.00  in Lmp Automotive Holdings on August 29, 2022 and sell it today you would lose (70.00)  from holding Lmp Automotive Holdings or give up 7.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Lmp Automotive Holdings  vs.  Bancor Network Token

 Performance (%) 
       Timeline  
Lmp Automotive Holdings 
Lmp Automotive Performance
0 of 100
Over the last 90 days Lmp Automotive Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Lmp Automotive is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lmp Automotive Price Channel

Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Bancor Network Token investors.

Bancor Price Channel

Lmp Automotive and Bancor Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lmp Automotive and Bancor Network

The main advantage of trading using opposite Lmp Automotive and Bancor Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lmp Automotive position performs unexpectedly, Bancor Network 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 Bancor Network will offset losses from the drop in Bancor Network's long position.
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The idea behind Lmp Automotive Holdings and Bancor Network Token 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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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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