Correlation Between Lightbridge Corp and Exponent

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

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

Diversification Opportunities for Lightbridge Corp and Exponent

-0.38

Correlation Coefficient

Lightbridge Corp  Exponent

Very good diversification

The 3 months correlation between Lightbridge and Exponent is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lightbridge Corp and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Lightbridge Corp 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 Lightbridge Corp are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Lightbridge Corp i.e., Lightbridge Corp and Exponent go up and down completely randomly.

Pair Corralation between Lightbridge Corp and Exponent

Given the investment horizon of 90 days Lightbridge Corp is expected to generate 5.67 times more return on investment than Exponent. However, Lightbridge Corp is 5.67 times more volatile than Exponent. It trades about 0.03 of its potential returns per unit of risk. Exponent is currently generating about -0.02 per unit of risk. If you would invest  243.00  in Lightbridge Corp on March 11, 2024 and sell it today you would earn a total of  0.00  from holding Lightbridge Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lightbridge Corp  vs.  Exponent

Lightbridge Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lightbridge Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Exponent

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exponent are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Exponent displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lightbridge Corp and Exponent

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

The idea behind Lightbridge Corp and Exponent 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.