Correlation Between Cardano and La Française

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

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

Diversification Opportunities for Cardano and La Française

0.28

Correlation Coefficient

Cardano  La Française

Modest diversification

The 3 months correlation between Cardano and 1WE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des and Cardano 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 Cardano are associated (or correlated) with La Française. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of Cardano i.e., Cardano and La Française go up and down completely randomly.

Pair Corralation between Cardano and La Française

Assuming the 90 days trading horizon Cardano is expected to generate 3.8 times more return on investment than La Française. However, Cardano is 3.8 times more volatile than La Franaise des. It trades about -0.02 of its potential returns per unit of risk. La Franaise des is currently generating about -0.14 per unit of risk. If you would invest  90.00  in Cardano on December 20, 2024 and sell it today you would lose (20.00) from holding Cardano or give up 22.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Cardano  vs.  La Franaise des

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

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 fragile 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.

Pair Trading with Cardano and La Française

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

The idea behind Cardano and La Franaise des 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.