Correlation Between Laurent Perrier and Tessenderlo

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

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

Diversification Opportunities for Laurent Perrier and Tessenderlo

-0.22

Correlation Coefficient

Laurent Perrier  Tessenderlo

Very good diversification

The 3 months correlation between Laurent and Tessenderlo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Laurent Perrier and Tessenderlo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tessenderlo and Laurent Perrier 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 Laurent Perrier are associated (or correlated) with Tessenderlo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tessenderlo has no effect on the direction of Laurent Perrier i.e., Laurent Perrier and Tessenderlo go up and down completely randomly.

Pair Corralation between Laurent Perrier and Tessenderlo

Assuming the 90 days trading horizon Laurent Perrier is expected to generate 0.65 times more return on investment than Tessenderlo. However, Laurent Perrier is 1.53 times less risky than Tessenderlo. It trades about -0.01 of its potential returns per unit of risk. Tessenderlo is currently generating about -0.19 per unit of risk. If you would invest  10,000  in Laurent Perrier on October 25, 2024 and sell it today you would lose (80.00) from holding Laurent Perrier or give up 0.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Laurent Perrier  vs.  Tessenderlo

Laurent Perrier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Laurent Perrier has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Laurent Perrier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tessenderlo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tessenderlo has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Laurent Perrier and Tessenderlo

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

The idea behind Laurent Perrier and Tessenderlo 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.