Correlation Between Lmp Automotive and Chembio Diagnostics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lmp Automotive and Chembio Diagnostics 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 Chembio Diagnostics 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 Chembio Diagnostics, you can compare the effects of market volatilities on Lmp Automotive and Chembio Diagnostics 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 Chembio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lmp Automotive and Chembio Diagnostics.

Diversification Opportunities for Lmp Automotive and Chembio Diagnostics

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Lmp Automotive and Chembio is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lmp Automotive Holdings and Chembio Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chembio Diagnostics 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 Chembio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chembio Diagnostics has no effect on the direction of Lmp Automotive i.e., Lmp Automotive and Chembio Diagnostics go up and down completely randomly.

Pair Corralation between Lmp Automotive and Chembio Diagnostics

Given the investment horizon of 90 days Lmp Automotive Holdings is expected to generate 0.54 times more return on investment than Chembio Diagnostics. However, Lmp Automotive Holdings is 1.84 times less risky than Chembio Diagnostics. It trades about -0.02 of its potential returns per unit of risk. Chembio Diagnostics is currently generating about -0.03 per unit of risk. If you would invest  2,568  in Lmp Automotive Holdings on September 8, 2022 and sell it today you would lose (1,743)  from holding Lmp Automotive Holdings or give up 67.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Lmp Automotive Holdings  vs.  Chembio Diagnostics

 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 current stock price disturbance, may contribute to short-term losses for the investors.

Lmp Automotive Price Channel

Chembio Diagnostics 
Chembio Performance
0 of 100
Over the last 90 days Chembio Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Chembio Price Channel

Lmp Automotive and Chembio Diagnostics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lmp Automotive and Chembio Diagnostics

The main advantage of trading using opposite Lmp Automotive and Chembio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lmp Automotive position performs unexpectedly, Chembio Diagnostics 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 Chembio Diagnostics will offset losses from the drop in Chembio Diagnostics' long position.
Lmp Automotive vs. Heineken Holding NV
Lmp Automotive vs. Tsingtao Brewery
Lmp Automotive vs. Davide Campari-Milano NV
Lmp Automotive vs. Coca-Cola Femsa SAB
The idea behind Lmp Automotive Holdings and Chembio Diagnostics 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.
Chembio Diagnostics vs. Johnson Johnson
Chembio Diagnostics vs. Bondbloxx ETF Trust
Chembio Diagnostics vs. Fidelity MSCI Energy
Chembio Diagnostics vs. Merck Company
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go