Correlation Between LOreal SA and Wiziboat

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

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

Diversification Opportunities for LOreal SA and Wiziboat

0.93

Correlation Coefficient

LOreal SA  Wiziboat

Almost no diversification

The 3 months correlation between LOreal and Wiziboat is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding LOreal SA and Wiziboat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiziboat SA and LOreal 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 LOreal SA are associated (or correlated) with Wiziboat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiziboat SA has no effect on the direction of LOreal SA i.e., LOreal SA and Wiziboat go up and down completely randomly.

Pair Corralation between LOreal SA and Wiziboat

If you would invest  33,350  in LOreal SA on October 3, 2024 and sell it today you would earn a total of  835.00  from holding LOreal SA or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	75.0%
Values	Daily Returns

LOreal SA  vs.  Wiziboat SA

LOreal SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LOreal SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Wiziboat SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wiziboat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with LOreal SA and Wiziboat

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

The idea behind LOreal SA and Wiziboat 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.