Correlation Between LandisGyr Group and Leclanche

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

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

Diversification Opportunities for LandisGyr Group and Leclanche

-0.32

Correlation Coefficient

LandisGyr Group  Leclanche

Very good diversification

The 3 months correlation between LandisGyr and Leclanche is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LandisGyr Group AG and Leclanche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leclanche SA and LandisGyr Group 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 LandisGyr Group AG are associated (or correlated) with Leclanche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leclanche SA has no effect on the direction of LandisGyr Group i.e., LandisGyr Group and Leclanche go up and down completely randomly.

Pair Corralation between LandisGyr Group and Leclanche

Assuming the 90 days trading horizon LandisGyr Group AG is expected to under-perform the Leclanche. But the stock apears to be less risky and, when comparing its historical volatility, LandisGyr Group AG is 11.03 times less risky than Leclanche. The stock trades about -0.26 of its potential returns per unit of risk. The Leclanche SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Leclanche SA on September 17, 2024 and sell it today you would earn a total of  1.00  from holding Leclanche SA or generate 5.26% return on investment over 90 days.

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

LandisGyr Group AG  vs.  Leclanche SA

LandisGyr Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LandisGyr Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Leclanche SA

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leclanche SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Leclanche showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LandisGyr Group and Leclanche

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

The idea behind LandisGyr Group AG and Leclanche 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..