Correlation Between LASSONDE INDUSTINC and CALTAGIRONE EDITORE
Can any of the company-specific risk be diversified away by investing in both LASSONDE INDUSTINC and CALTAGIRONE EDITORE 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 LASSONDE INDUSTINC and CALTAGIRONE EDITORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LASSONDE INDUSTINC A and CALTAGIRONE EDITORE, you can compare the effects of market volatilities on LASSONDE INDUSTINC and CALTAGIRONE EDITORE 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 LASSONDE INDUSTINC with a short position of CALTAGIRONE EDITORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LASSONDE INDUSTINC and CALTAGIRONE EDITORE.
Diversification Opportunities for LASSONDE INDUSTINC and CALTAGIRONE EDITORE
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LASSONDE and CALTAGIRONE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding LASSONDE INDUSTINC A and CALTAGIRONE EDITORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CALTAGIRONE EDITORE and LASSONDE INDUSTINC 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 LASSONDE INDUSTINC A are associated (or correlated) with CALTAGIRONE EDITORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CALTAGIRONE EDITORE has no effect on the direction of LASSONDE INDUSTINC i.e., LASSONDE INDUSTINC and CALTAGIRONE EDITORE go up and down completely randomly.
Pair Corralation between LASSONDE INDUSTINC and CALTAGIRONE EDITORE
Assuming the 90 days horizon LASSONDE INDUSTINC is expected to generate 4.06 times less return on investment than CALTAGIRONE EDITORE. But when comparing it to its historical volatility, LASSONDE INDUSTINC A is 1.63 times less risky than CALTAGIRONE EDITORE. It trades about 0.06 of its potential returns per unit of risk. CALTAGIRONE EDITORE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 129.00 in CALTAGIRONE EDITORE on November 22, 2024 and sell it today you would earn a total of 37.00 from holding CALTAGIRONE EDITORE or generate 28.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LASSONDE INDUSTINC A vs. CALTAGIRONE EDITORE
Performance |
Timeline |
LASSONDE INDUSTINC |
CALTAGIRONE EDITORE |
LASSONDE INDUSTINC and CALTAGIRONE EDITORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LASSONDE INDUSTINC and CALTAGIRONE EDITORE
The main advantage of trading using opposite LASSONDE INDUSTINC and CALTAGIRONE EDITORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LASSONDE INDUSTINC position performs unexpectedly, CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE will offset losses from the drop in CALTAGIRONE EDITORE's long position.LASSONDE INDUSTINC vs. Coca Cola FEMSA SAB | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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