Correlation Between Lonza Group and China New
Can any of the company-specific risk be diversified away by investing in both Lonza Group and China New 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 Lonza Group and China New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lonza Group and China New Energy, you can compare the effects of market volatilities on Lonza Group and China New 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 Lonza Group with a short position of China New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonza Group and China New.
Diversification Opportunities for Lonza Group and China New
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lonza and China is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lonza Group and China New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China New Energy and Lonza Group 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 Lonza Group are associated (or correlated) with China New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China New Energy has no effect on the direction of Lonza Group i.e., Lonza Group and China New go up and down completely randomly.
Pair Corralation between Lonza Group and China New
If you would invest 63,214 in Lonza Group on November 19, 2024 and sell it today you would earn a total of 1,116 from holding Lonza Group or generate 1.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lonza Group vs. China New Energy
Performance |
Timeline |
Lonza Group |
China New Energy |
Lonza Group and China New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lonza Group and China New
The main advantage of trading using opposite Lonza Group and China New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonza Group position performs unexpectedly, China New 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 China New will offset losses from the drop in China New's long position.Lonza Group vs. China New Energy | Lonza Group vs. Sonic Healthcare Ltd | Lonza Group vs. Charles River Laboratories | Lonza Group vs. Qiagen NV |
China New vs. Sonic Healthcare Ltd | China New vs. Lonza Group | China New vs. Charles River Laboratories | China New vs. Qiagen NV |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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