Correlation Between LGI and XPLR Infrastructure
Can any of the company-specific risk be diversified away by investing in both LGI and XPLR Infrastructure 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 LGI and XPLR Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI and XPLR Infrastructure LP, you can compare the effects of market volatilities on LGI and XPLR Infrastructure 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 LGI with a short position of XPLR Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI and XPLR Infrastructure.
Diversification Opportunities for LGI and XPLR Infrastructure
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LGI and XPLR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LGI and XPLR Infrastructure LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XPLR Infrastructure and LGI 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 LGI are associated (or correlated) with XPLR Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XPLR Infrastructure has no effect on the direction of LGI i.e., LGI and XPLR Infrastructure go up and down completely randomly.
Pair Corralation between LGI and XPLR Infrastructure
Assuming the 90 days trading horizon LGI is expected to generate 1.27 times more return on investment than XPLR Infrastructure. However, LGI is 1.27 times more volatile than XPLR Infrastructure LP. It trades about 0.05 of its potential returns per unit of risk. XPLR Infrastructure LP is currently generating about -0.07 per unit of risk. If you would invest 385.00 in LGI on August 25, 2025 and sell it today you would earn a total of 30.00 from holding LGI or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
LGI vs. XPLR Infrastructure LP
Performance |
| Timeline |
| LGI |
| XPLR Infrastructure |
LGI and XPLR Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI and XPLR Infrastructure
The main advantage of trading using opposite LGI and XPLR Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI position performs unexpectedly, XPLR Infrastructure 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 XPLR Infrastructure will offset losses from the drop in XPLR Infrastructure's long position.The idea behind LGI and XPLR Infrastructure LP 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.| XPLR Infrastructure vs. Middlesex Water | XPLR Infrastructure vs. Entergy Arkansas LLC | XPLR Infrastructure vs. UNITIL | XPLR Infrastructure vs. Energy Vault Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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