Correlation Between LOral SA and CPU SOFTWAREHOUSE

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

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

Diversification Opportunities for LOral SA and CPU SOFTWAREHOUSE

0.0

Correlation Coefficient

LOral SA  CPU SOFTWAREHOUSE

Pay attention - limited upside

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

Pair Corralation between LOral SA and CPU SOFTWAREHOUSE

If you would invest  89.00  in CPU SOFTWAREHOUSE on October 26, 2024 and sell it today you would earn a total of  22.00  from holding CPU SOFTWAREHOUSE or generate 24.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

LOral SA  vs.  CPU SOFTWAREHOUSE

LOral SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

CPU SOFTWAREHOUSE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CPU SOFTWAREHOUSE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, CPU SOFTWAREHOUSE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LOral SA and CPU SOFTWAREHOUSE

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

The idea behind LOral SA and CPU SOFTWAREHOUSE 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.