Correlation Between Vicat SA and Lacroix Group

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

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

Diversification Opportunities for Vicat SA and Lacroix Group

-0.79

Correlation Coefficient

Vicat SA  Lacroix Group

Pay attention - limited upside

The 3 months correlation between Vicat and Lacroix is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vicat SA 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 Vicat 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 Vicat SA 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 Vicat SA i.e., Vicat SA and Lacroix Group go up and down completely randomly.

Pair Corralation between Vicat SA and Lacroix Group

Assuming the 90 days trading horizon Vicat SA is expected to generate 0.62 times more return on investment than Lacroix Group. However, Vicat SA is 1.62 times less risky than Lacroix Group. It trades about 0.26 of its potential returns per unit of risk. Lacroix Group SA is currently generating about -0.05 per unit of risk. If you would invest  3,560  in Vicat SA on December 5, 2024 and sell it today you would earn a total of  1,010  from holding Vicat SA or generate 28.37% return on investment over 90 days.

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

Vicat SA  vs.  Lacroix Group SA

Vicat SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vicat SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vicat SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Lacroix Group SA

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vicat SA and Lacroix Group

The main advantage of trading using opposite Vicat SA and Lacroix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicat SA 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 Vicat SA 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.