Correlation Between Linedata Services and FOSTOURGRP EO-0001

Can any of the company-specific risk be diversified away by investing in both Linedata Services and FOSTOURGRP EO-0001 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 FOSTOURGRP EO-0001 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 FOSTOURGRP EO 0001, you can compare the effects of market volatilities on Linedata Services and FOSTOURGRP EO-0001 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 FOSTOURGRP EO-0001. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and FOSTOURGRP EO-0001.

Diversification Opportunities for Linedata Services and FOSTOURGRP EO-0001

-0.41

Correlation Coefficient

Linedata Services  FOSTOURGRP EO-0001

Very good diversification

The 3 months correlation between Linedata and FOSTOURGRP is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and FOSTOURGRP EO 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOSTOURGRP EO 0001 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 FOSTOURGRP EO-0001. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOSTOURGRP EO 0001 has no effect on the direction of Linedata Services i.e., Linedata Services and FOSTOURGRP EO-0001 go up and down completely randomly.

Pair Corralation between Linedata Services and FOSTOURGRP EO-0001

Assuming the 90 days trading horizon Linedata Services SA is expected to under-perform the FOSTOURGRP EO-0001. In addition to that, Linedata Services is 2.11 times more volatile than FOSTOURGRP EO 0001. It trades about -0.02 of its total potential returns per unit of risk. FOSTOURGRP EO 0001 is currently generating about 0.08 per unit of volatility. If you would invest  89.00  in FOSTOURGRP EO 0001 on December 23, 2024 and sell it today you would earn a total of  3.00  from holding FOSTOURGRP EO 0001 or generate 3.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Linedata Services SA  vs.  FOSTOURGRP EO 0001

Linedata Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Linedata Services SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Linedata Services is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

FOSTOURGRP EO 0001

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FOSTOURGRP EO 0001 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FOSTOURGRP EO-0001 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Linedata Services and FOSTOURGRP EO-0001

The main advantage of trading using opposite Linedata Services and FOSTOURGRP EO-0001 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, FOSTOURGRP EO-0001 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 FOSTOURGRP EO-0001 will offset losses from the drop in FOSTOURGRP EO-0001's long position.

The idea behind Linedata Services SA and FOSTOURGRP EO 0001 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.