Correlation Between Leclanche and Ascom Holding
Can any of the company-specific risk be diversified away by investing in both Leclanche and Ascom Holding 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 Leclanche and Ascom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leclanche SA and Ascom Holding AG, you can compare the effects of market volatilities on Leclanche and Ascom Holding 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 Leclanche with a short position of Ascom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leclanche and Ascom Holding.
Diversification Opportunities for Leclanche and Ascom Holding
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leclanche and Ascom is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Leclanche SA and Ascom Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascom Holding AG and Leclanche 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 Leclanche SA are associated (or correlated) with Ascom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascom Holding AG has no effect on the direction of Leclanche i.e., Leclanche and Ascom Holding go up and down completely randomly.
Pair Corralation between Leclanche and Ascom Holding
Assuming the 90 days trading horizon Leclanche SA is expected to generate 1.77 times more return on investment than Ascom Holding. However, Leclanche is 1.77 times more volatile than Ascom Holding AG. It trades about 0.04 of its potential returns per unit of risk. Ascom Holding AG is currently generating about -0.07 per unit of risk. If you would invest 20.00 in Leclanche SA on December 30, 2024 and sell it today you would earn a total of 1.00 from holding Leclanche SA or generate 5.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Leclanche SA vs. Ascom Holding AG
Performance |
Timeline |
Leclanche SA |
Ascom Holding AG |
Leclanche and Ascom Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leclanche and Ascom Holding
The main advantage of trading using opposite Leclanche and Ascom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leclanche position performs unexpectedly, Ascom Holding 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 Ascom Holding will offset losses from the drop in Ascom Holding's long position.Leclanche vs. Meyer Burger Tech | Leclanche vs. Evolva Holding SA | Leclanche vs. Kudelski | Leclanche vs. OC Oerlikon Corp |
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Check out your portfolio center.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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