Correlation Between Learning Technologies and Chocoladefabriken

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

By analyzing existing cross correlation between Learning Technologies Group and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Learning Technologies and Chocoladefabriken 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 Learning Technologies with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Learning Technologies and Chocoladefabriken.

Diversification Opportunities for Learning Technologies and Chocoladefabriken

-0.33

Correlation Coefficient

Learning Technologies  Chocoladefabriken

Very good diversification

The 3 months correlation between Learning and Chocoladefabriken is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Learning Technologies Group and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Learning Technologies 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 Learning Technologies Group are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Learning Technologies i.e., Learning Technologies and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Learning Technologies and Chocoladefabriken

Assuming the 90 days trading horizon Learning Technologies Group is expected to under-perform the Chocoladefabriken. But the stock apears to be less risky and, when comparing its historical volatility, Learning Technologies Group is 3.55 times less risky than Chocoladefabriken. The stock trades about -0.13 of its potential returns per unit of risk. The Chocoladefabriken Lindt Spruengli is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9,840,000  in Chocoladefabriken Lindt Spruengli on October 11, 2024 and sell it today you would earn a total of  160,000  from holding Chocoladefabriken Lindt Spruengli or generate 1.63% return on investment over 90 days.

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

Learning Technologies Group  vs.  Chocoladefabriken Lindt Spruen

Learning Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Learning Technologies Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Learning Technologies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Learning Technologies and Chocoladefabriken

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

The idea behind Learning Technologies Group and Chocoladefabriken Lindt Spruengli 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.