Correlation Between Erie Indemnity and LQ BARR

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

Diversification Opportunities for Erie Indemnity and LQ BARR

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Erie Indemnity and Q00277 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Erie Indemnity and LQ BARR EXP HMINZA 60 190124 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LQ BARR EXP and Erie Indemnity 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 Erie Indemnity are associated (or correlated) with LQ BARR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LQ BARR EXP has no effect on the direction of Erie Indemnity i.e., Erie Indemnity and LQ BARR go up and down completely randomly.

Pair Corralation between Erie Indemnity and LQ BARR

If you would invest  21,493  in Erie Indemnity on July 2, 2022 and sell it today you would earn a total of  502.00  from holding Erie Indemnity or generate 2.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Erie Indemnity  vs.  LQ BARR EXP HMINZA 60 190124

 Performance (%) 
       Timeline  
Erie Indemnity 
Erie Indemnity Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Erie Indemnity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward indicators, Erie Indemnity exhibited solid returns over the last few months and may actually be approaching a breakup point.

Erie Indemnity Price Channel

LQ BARR EXP 
Q00277 Performance
0 of 100
Over the last 90 days LQ BARR EXP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LQ BARR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Erie Indemnity and LQ BARR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Erie Indemnity and LQ BARR

The main advantage of trading using opposite Erie Indemnity and LQ BARR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erie Indemnity position performs unexpectedly, LQ BARR 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 LQ BARR will offset losses from the drop in LQ BARR's long position.
Erie Indemnity vs. Amazon Inc
The idea behind Erie Indemnity and LQ BARR EXP 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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