Correlation Between Lexibook Linguistic and Manitou BF

Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Manitou BF 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 Manitou BF 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 Manitou BF SA, you can compare the effects of market volatilities on Lexibook Linguistic and Manitou BF 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 Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Manitou BF.

Diversification Opportunities for Lexibook Linguistic and Manitou BF

-0.44

Correlation Coefficient

Lexibook Linguistic  Manitou BF

Very good diversification

The 3 months correlation between Lexibook and Manitou is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF 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 Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Manitou BF go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and Manitou BF

Assuming the 90 days trading horizon Lexibook Linguistic Electronic is expected to generate 0.16 times more return on investment than Manitou BF. However, Lexibook Linguistic Electronic is 6.19 times less risky than Manitou BF. It trades about 0.08 of its potential returns per unit of risk. Manitou BF SA is currently generating about -0.13 per unit of risk. If you would invest  391.00  in Lexibook Linguistic Electronic on August 31, 2024 and sell it today you would earn a total of  6.00  from holding Lexibook Linguistic Electronic or generate 1.53% return on investment over 90 days.

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

Lexibook Linguistic Electronic  vs.  Manitou BF SA

Lexibook Linguistic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 5 (%) 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.

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lexibook Linguistic and Manitou BF

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

The idea behind Lexibook Linguistic Electronic and Manitou BF 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.