Correlation Between Linedata Services and Haulotte Group
Can any of the company-specific risk be diversified away by investing in both Linedata Services and Haulotte Group 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 Linedata Services and Haulotte Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and Haulotte Group SA, you can compare the effects of market volatilities on Linedata Services and Haulotte Group 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 Linedata Services with a short position of Haulotte Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Haulotte Group.
Diversification Opportunities for Linedata Services and Haulotte Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Linedata and Haulotte is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and Haulotte Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haulotte Group SA and Linedata Services 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 Linedata Services SA are associated (or correlated) with Haulotte Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haulotte Group SA has no effect on the direction of Linedata Services i.e., Linedata Services and Haulotte Group go up and down completely randomly.
Pair Corralation between Linedata Services and Haulotte Group
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 0.7 times more return on investment than Haulotte Group. However, Linedata Services SA is 1.43 times less risky than Haulotte Group. It trades about 0.14 of its potential returns per unit of risk. Haulotte Group SA is currently generating about -0.02 per unit of risk. If you would invest 6,600 in Linedata Services SA on September 5, 2024 and sell it today you would earn a total of 1,100 from holding Linedata Services SA or generate 16.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Linedata Services SA vs. Haulotte Group SA
Performance |
Timeline |
Linedata Services |
Haulotte Group SA |
Linedata Services and Haulotte Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Linedata Services and Haulotte Group
The main advantage of trading using opposite Linedata Services and Haulotte Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, Haulotte Group 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 Haulotte Group will offset losses from the drop in Haulotte Group's long position.Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme | Linedata Services vs. Groupe CRIT SA |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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