Correlation Between Lhyfe SA and Renewal Fuels

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

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

Diversification Opportunities for Lhyfe SA and Renewal Fuels

0.0

Correlation Coefficient

Lhyfe SA  Renewal Fuels

Pay attention - limited upside

The 3 months correlation between Lhyfe and Renewal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lhyfe SA and Renewal Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renewal Fuels and Lhyfe SA 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 Lhyfe SA are associated (or correlated) with Renewal Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renewal Fuels has no effect on the direction of Lhyfe SA i.e., Lhyfe SA and Renewal Fuels go up and down completely randomly.

Pair Corralation between Lhyfe SA and Renewal Fuels

If you would invest  0.00  in Renewal Fuels on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Renewal Fuels or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Lhyfe SA  vs.  Renewal Fuels

Lhyfe SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lhyfe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lhyfe SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Renewal Fuels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Renewal Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lhyfe SA and Renewal Fuels

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

The idea behind Lhyfe SA and Renewal Fuels 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.