Correlation Between La Franaise and Sankyo Co

Can any of the company-specific risk be diversified away by investing in both La Franaise and Sankyo Co 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 La Franaise and Sankyo Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between La Franaise des and Sankyo Co, you can compare the effects of market volatilities on La Franaise and Sankyo Co 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 La Franaise with a short position of Sankyo Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Franaise and Sankyo Co.

Diversification Opportunities for La Franaise and Sankyo Co

-0.36

Correlation Coefficient

La Franaise  Sankyo Co

Very good diversification

The 3 months correlation between 1WE and Sankyo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding La Franaise des and Sankyo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sankyo Co and La Franaise 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 La Franaise des are associated (or correlated) with Sankyo Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sankyo Co has no effect on the direction of La Franaise i.e., La Franaise and Sankyo Co go up and down completely randomly.

Pair Corralation between La Franaise and Sankyo Co

Assuming the 90 days horizon La Franaise des is expected to under-perform the Sankyo Co. In addition to that, La Franaise is 1.02 times more volatile than Sankyo Co. It trades about -0.18 of its total potential returns per unit of risk. Sankyo Co is currently generating about 0.09 per unit of volatility. If you would invest  1,280  in Sankyo Co on December 25, 2024 and sell it today you would earn a total of  130.00  from holding Sankyo Co or generate 10.16% return on investment over 90 days.

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

La Franaise des  vs.  Sankyo Co

La Franaise des

Risk-Adjusted Performance

Very Weak

Over the last 90 days La Franaise des has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sankyo Co

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sankyo Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sankyo Co may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with La Franaise and Sankyo Co

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

The idea behind La Franaise des and Sankyo Co 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.