Correlation Between LBG MEDIA and SUN ART

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

By analyzing existing cross correlation between LBG MEDIA PLC and SUN ART RETAIL, you can compare the effects of market volatilities on LBG MEDIA and SUN ART 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 LBG MEDIA with a short position of SUN ART. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG MEDIA and SUN ART.

Diversification Opportunities for LBG MEDIA and SUN ART

0.14

Correlation Coefficient

LBG MEDIA  SUN ART

Average diversification

The 3 months correlation between LBG and SUN is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding LBG MEDIA PLC and SUN ART RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN ART RETAIL and LBG MEDIA 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 LBG MEDIA PLC are associated (or correlated) with SUN ART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN ART RETAIL has no effect on the direction of LBG MEDIA i.e., LBG MEDIA and SUN ART go up and down completely randomly.

Pair Corralation between LBG MEDIA and SUN ART

Assuming the 90 days horizon LBG MEDIA PLC is expected to under-perform the SUN ART. In addition to that, LBG MEDIA is 1.09 times more volatile than SUN ART RETAIL. It trades about -0.01 of its total potential returns per unit of risk. SUN ART RETAIL is currently generating about 0.13 per unit of volatility. If you would invest  21.00  in SUN ART RETAIL on March 24, 2025 and sell it today you would earn a total of  6.00  from holding SUN ART RETAIL or generate 28.57% return on investment over 90 days.

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

LBG MEDIA PLC  vs.  SUN ART RETAIL

LBG MEDIA PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LBG MEDIA PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LBG MEDIA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SUN ART RETAIL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, SUN ART exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LBG MEDIA and SUN ART

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

The idea behind LBG MEDIA PLC and SUN ART RETAIL 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.