Correlation Between Kaufman Et and Lexibook Linguistic

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

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

Diversification Opportunities for Kaufman Et and Lexibook Linguistic

-0.4

Correlation Coefficient

Kaufman Et  Lexibook Linguistic

Very good diversification

The 3 months correlation between Kaufman and Lexibook is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of Kaufman Et i.e., Kaufman Et and Lexibook Linguistic go up and down completely randomly.

Pair Corralation between Kaufman Et and Lexibook Linguistic

Assuming the 90 days trading horizon Kaufman Et Broad is expected to under-perform the Lexibook Linguistic. In addition to that, Kaufman Et is 1.7 times more volatile than Lexibook Linguistic Electronic. It trades about -0.1 of its total potential returns per unit of risk. Lexibook Linguistic Electronic is currently generating about 0.0 per unit of volatility. If you would invest  400.00  in Lexibook Linguistic Electronic on October 15, 2024 and sell it today you would lose (1.00) from holding Lexibook Linguistic Electronic or give up 0.25% of portfolio value over 90 days.

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

Kaufman Et Broad  vs.  Lexibook Linguistic Electronic

Kaufman Et Broad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaufman Et Broad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Lexibook Linguistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lexibook Linguistic Electronic has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Kaufman Et and Lexibook Linguistic

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

The idea behind Kaufman Et Broad and Lexibook Linguistic Electronic 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.