Correlation Between LOral SA and LOréal SA

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

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

Diversification Opportunities for LOral SA and LOréal SA

0.0

Correlation Coefficient

LOral SA  LOréal SA

Pay attention - limited upside

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

Pair Corralation between LOral SA and LOréal SA

If you would invest  0.00  in LOral SA on October 8, 2024 and sell it today you would earn a total of  0.00  from holding LOral SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

LOral SA  vs.  LOral SA

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.

LOréal 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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with LOral SA and LOréal SA

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

The idea behind LOral SA and LOral 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.