Correlation Between Locafy and Locafy
Can any of the company-specific risk be diversified away by investing in both Locafy and Locafy 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 Locafy and Locafy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locafy and Locafy Limited, you can compare the effects of market volatilities on Locafy and Locafy 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 Locafy with a short position of Locafy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locafy and Locafy.
Diversification Opportunities for Locafy and Locafy
Very weak diversification
The 3 months correlation between Locafy and Locafy is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Locafy and Locafy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy Limited and Locafy 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 Locafy are associated (or correlated) with Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy Limited has no effect on the direction of Locafy i.e., Locafy and Locafy go up and down completely randomly.
Pair Corralation between Locafy and Locafy
Given the investment horizon of 90 days Locafy is expected to generate 1.75 times more return on investment than Locafy. However, Locafy is 1.75 times more volatile than Locafy Limited. It trades about 0.07 of its potential returns per unit of risk. Locafy Limited is currently generating about 0.12 per unit of risk. If you would invest 408.00 in Locafy on June 5, 2025 and sell it today you would lose (2.00) from holding Locafy or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.9% |
| Values | Daily Returns |
Locafy vs. Locafy Limited
Performance |
| Timeline |
| Locafy |
| Locafy Limited |
Risk-Adjusted Performance
Fair
Weak | Strong |
Locafy and Locafy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locafy and Locafy
The main advantage of trading using opposite Locafy and Locafy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locafy position performs unexpectedly, Locafy 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 Locafy will offset losses from the drop in Locafy's long position.| Locafy vs. Metalpha Technology Holding | Locafy vs. TuanChe ADR | Locafy vs. Thryv Holdings | Locafy vs. Aclarion |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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