Correlation Between D3 Energy and LGI
Can any of the company-specific risk be diversified away by investing in both D3 Energy and LGI 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 D3 Energy and LGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between D3 Energy and LGI, you can compare the effects of market volatilities on D3 Energy and LGI 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 D3 Energy with a short position of LGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of D3 Energy and LGI.
Diversification Opportunities for D3 Energy and LGI
Very good diversification
The 3 months correlation between D3E and LGI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding D3 Energy and LGI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGI and D3 Energy 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 D3 Energy are associated (or correlated) with LGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGI has no effect on the direction of D3 Energy i.e., D3 Energy and LGI go up and down completely randomly.
Pair Corralation between D3 Energy and LGI
Assuming the 90 days trading horizon D3 Energy is expected to under-perform the LGI. In addition to that, D3 Energy is 2.51 times more volatile than LGI. It trades about -0.04 of its total potential returns per unit of risk. LGI is currently generating about 0.03 per unit of volatility. If you would invest 391.00 in LGI on September 11, 2025 and sell it today you would earn a total of 11.00 from holding LGI or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
D3 Energy vs. LGI
Performance |
| Timeline |
| D3 Energy |
| LGI |
D3 Energy and LGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with D3 Energy and LGI
The main advantage of trading using opposite D3 Energy and LGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D3 Energy position performs unexpectedly, LGI 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 LGI will offset losses from the drop in LGI's long position.| D3 Energy vs. Westpac Banking | D3 Energy vs. Olympio Metals | D3 Energy vs. Truscott Mining | D3 Energy vs. Catalyst Metals |
| LGI vs. Oneview Healthcare Plc | LGI vs. Southern Cross Media | LGI vs. Global Health | LGI vs. Epsilon Healthcare |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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