Correlation Between Lexibook Linguistic and OPmobility

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

Diversification Opportunities for Lexibook Linguistic and OPmobility

0.3

Correlation Coefficient

Lexibook Linguistic  OPmobility

Weak diversification

The 3 months correlation between Lexibook and OPmobility is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and OPmobility SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPmobility SE 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 OPmobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPmobility SE has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and OPmobility go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and OPmobility

Assuming the 90 days trading horizon Lexibook Linguistic Electronic is expected to generate 1.22 times more return on investment than OPmobility. However, Lexibook Linguistic is 1.22 times more volatile than OPmobility SE. It trades about 0.12 of its potential returns per unit of risk. OPmobility SE is currently generating about 0.03 per unit of risk. If you would invest  400.00  in Lexibook Linguistic Electronic on December 26, 2024 and sell it today you would earn a total of  108.00  from holding Lexibook Linguistic Electronic or generate 27.0% return on investment over 90 days.

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

Lexibook Linguistic Electronic  vs.  OPmobility SE

Lexibook Linguistic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Lexibook Linguistic reported solid returns over the last few months and may actually be approaching a breakup point.

OPmobility SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OPmobility SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, OPmobility is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lexibook Linguistic and OPmobility

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

The idea behind Lexibook Linguistic Electronic and OPmobility SE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.