Correlation Between Logintrade and Eco5tech

Can any of the company-specific risk be diversified away by investing in both Logintrade and Eco5tech 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 Logintrade and Eco5tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Logintrade SA and eco5tech SA, you can compare the effects of market volatilities on Logintrade and Eco5tech 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 Logintrade with a short position of Eco5tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logintrade and Eco5tech.

Diversification Opportunities for Logintrade and Eco5tech

-0.23

Correlation Coefficient

Logintrade  Eco5tech

Very good diversification

The 3 months correlation between Logintrade and Eco5tech is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Logintrade SA and eco5tech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eco5tech SA and Logintrade 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 Logintrade SA are associated (or correlated) with Eco5tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eco5tech SA has no effect on the direction of Logintrade i.e., Logintrade and Eco5tech go up and down completely randomly.

Pair Corralation between Logintrade and Eco5tech

Assuming the 90 days trading horizon Logintrade SA is expected to generate 1.26 times more return on investment than Eco5tech. However, Logintrade is 1.26 times more volatile than eco5tech SA. It trades about 0.11 of its potential returns per unit of risk. eco5tech SA is currently generating about -0.09 per unit of risk. If you would invest  370.00  in Logintrade SA on October 11, 2024 and sell it today you would earn a total of  20.00  from holding Logintrade SA or generate 5.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Logintrade SA  vs.  eco5tech SA

Logintrade SA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Logintrade SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Logintrade reported solid returns over the last few months and may actually be approaching a breakup point.

eco5tech SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in eco5tech SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Eco5tech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Logintrade and Eco5tech

The main advantage of trading using opposite Logintrade and Eco5tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logintrade position performs unexpectedly, Eco5tech 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 Eco5tech will offset losses from the drop in Eco5tech's long position.

The idea behind Logintrade SA and eco5tech 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.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.