Correlation Between Passat Socit and Lacroix Group

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

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

Diversification Opportunities for Passat Socit and Lacroix Group

0.42

Correlation Coefficient

Passat Socit  Lacroix Group

Very weak diversification

The 3 months correlation between Passat and Lacroix is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Passat Socit Anonyme and Lacroix Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lacroix Group SA and Passat Socit 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 Passat Socit Anonyme are associated (or correlated) with Lacroix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lacroix Group SA has no effect on the direction of Passat Socit i.e., Passat Socit and Lacroix Group go up and down completely randomly.

Pair Corralation between Passat Socit and Lacroix Group

Assuming the 90 days trading horizon Passat Socit Anonyme is expected to generate 0.83 times more return on investment than Lacroix Group. However, Passat Socit Anonyme is 1.21 times less risky than Lacroix Group. It trades about -0.05 of its potential returns per unit of risk. Lacroix Group SA is currently generating about -0.43 per unit of risk. If you would invest  505.00  in Passat Socit Anonyme on September 3, 2024 and sell it today you would lose (35.00) from holding Passat Socit Anonyme or give up 6.93% of portfolio value over 90 days.

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

Passat Socit Anonyme  vs.  Lacroix Group SA

Passat Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Passat Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Passat Socit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lacroix Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lacroix Group 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Passat Socit and Lacroix Group

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

The idea behind Passat Socit Anonyme and Lacroix Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.