Correlation Between Lexibook Linguistic and Sogeclair

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

By analyzing existing cross correlation between Lexibook Linguistic Electronic and Sogeclair SA, you can compare the effects of market volatilities on Lexibook Linguistic and Sogeclair 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 Lexibook Linguistic with a short position of Sogeclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Sogeclair.

Diversification Opportunities for Lexibook Linguistic and Sogeclair

0.54

Correlation Coefficient

Lexibook Linguistic  Sogeclair

Very weak diversification

The 3 months correlation between Lexibook and Sogeclair is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Lexibook Linguistic 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 Lexibook Linguistic Electronic are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Sogeclair go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and Sogeclair

Assuming the 90 days trading horizon Lexibook Linguistic is expected to generate 814.33 times less return on investment than Sogeclair. But when comparing it to its historical volatility, Lexibook Linguistic Electronic is 10.76 times less risky than Sogeclair. It trades about 0.0 of its potential returns per unit of risk. Sogeclair SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,865  in Sogeclair SA on October 11, 2024 and sell it today you would earn a total of  75.00  from holding Sogeclair SA or generate 4.02% return on investment over 90 days.

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

Lexibook Linguistic Electronic  vs.  Sogeclair SA

Lexibook Linguistic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Lexibook Linguistic is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sogeclair SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sogeclair SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sogeclair reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lexibook Linguistic and Sogeclair

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

The idea behind Lexibook Linguistic Electronic and Sogeclair SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.