Correlation Between Guerbet S and Lisi SA

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

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

Diversification Opportunities for Guerbet S and Lisi SA

-0.14

Correlation Coefficient

Guerbet S  Lisi SA

Good diversification

The 3 months correlation between Guerbet and Lisi is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Lisi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisi SA and Guerbet S 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 Guerbet S A are associated (or correlated) with Lisi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisi SA has no effect on the direction of Guerbet S i.e., Guerbet S and Lisi SA go up and down completely randomly.

Pair Corralation between Guerbet S and Lisi SA

Assuming the 90 days trading horizon Guerbet S is expected to generate 5.14 times less return on investment than Lisi SA. But when comparing it to its historical volatility, Guerbet S A is 1.09 times less risky than Lisi SA. It trades about 0.05 of its potential returns per unit of risk. Lisi SA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,170  in Lisi SA on December 22, 2024 and sell it today you would earn a total of  770.00  from holding Lisi SA or generate 35.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Guerbet S A  vs.  Lisi SA

Guerbet S A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guerbet S A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guerbet S is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lisi SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lisi SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Lisi SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guerbet S and Lisi SA

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

The idea behind Guerbet S A and Lisi 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.