Correlation Between A-Mark Precious and Lpl Financial

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

Diversification Opportunities for A-Mark Precious and Lpl Financial

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between A-Mark and Lpl Financial is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding A-Mark Precious Meta and Lpl Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lpl Financial Holdings and A-Mark Precious 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 A-Mark Precious Meta are associated (or correlated) with Lpl Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lpl Financial Holdings has no effect on the direction of A-Mark Precious i.e., A-Mark Precious and Lpl Financial go up and down completely randomly.

Pair Corralation between A-Mark Precious and Lpl Financial

Given the investment horizon of 90 days A-Mark Precious is expected to generate 1.17 times less return on investment than Lpl Financial. In addition to that, A-Mark Precious is 1.28 times more volatile than Lpl Financial Holdings. It trades about 0.05 of its total potential returns per unit of risk. Lpl Financial Holdings is currently generating about 0.07 per unit of volatility. If you would invest  14,582  in Lpl Financial Holdings on May 20, 2022 and sell it today you would earn a total of  8,734  from holding Lpl Financial Holdings or generate 59.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

A-Mark Precious Meta  vs.  Lpl Financial Holdings

 Performance (%) 
       Timeline  
A-Mark Precious Meta 
A-Mark Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in A-Mark Precious Meta are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, A-Mark Precious demonstrated solid returns over the last few months and may actually be approaching a breakup point.

A-Mark Price Channel

Lpl Financial Holdings 
Lpl Financial Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Lpl Financial Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Lpl Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Lpl Financial Price Channel

A-Mark Precious and Lpl Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with A-Mark Precious and Lpl Financial

The main advantage of trading using opposite A-Mark Precious and Lpl Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A-Mark Precious position performs unexpectedly, Lpl Financial 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 Lpl Financial will offset losses from the drop in Lpl Financial's long position.
The idea behind A-Mark Precious Meta and Lpl Financial Holdings 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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