Correlation Between LPL Financial and Rbr Top

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

By analyzing existing cross correlation between LPL Financial Holdings and Rbr Top Offices, you can compare the effects of market volatilities on LPL Financial and Rbr Top 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 LPL Financial with a short position of Rbr Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPL Financial and Rbr Top.

Diversification Opportunities for LPL Financial and Rbr Top

0.15

Correlation Coefficient

LPL Financial  Rbr Top

Average diversification

The 3 months correlation between LPL and Rbr is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Rbr Top Offices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbr Top Offices and LPL Financial 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 LPL Financial Holdings are associated (or correlated) with Rbr Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbr Top Offices has no effect on the direction of LPL Financial i.e., LPL Financial and Rbr Top go up and down completely randomly.

Pair Corralation between LPL Financial and Rbr Top

Assuming the 90 days trading horizon LPL Financial Holdings is expected to generate 1.83 times more return on investment than Rbr Top. However, LPL Financial is 1.83 times more volatile than Rbr Top Offices. It trades about 0.15 of its potential returns per unit of risk. Rbr Top Offices is currently generating about 0.04 per unit of risk. If you would invest  9,875  in LPL Financial Holdings on April 24, 2025 and sell it today you would earn a total of  1,717  from holding LPL Financial Holdings or generate 17.39% return on investment over 90 days.

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

LPL Financial Holdings  vs.  Rbr Top Offices

LPL Financial Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LPL Financial Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LPL Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Rbr Top Offices

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rbr Top Offices are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Rbr Top is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LPL Financial and Rbr Top

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

The idea behind LPL Financial Holdings and Rbr Top Offices 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 the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.