Correlation Between LOreal SA and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both LOreal SA and Beeks Trading 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 Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOreal SA and Beeks Trading, you can compare the effects of market volatilities on LOreal SA and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOreal SA and Beeks Trading.
Diversification Opportunities for LOreal SA and Beeks Trading
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LOreal and Beeks is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding LOreal SA and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of LOreal SA i.e., LOreal SA and Beeks Trading go up and down completely randomly.
Pair Corralation between LOreal SA and Beeks Trading
If you would invest 25,600 in Beeks Trading on September 14, 2024 and sell it today you would earn a total of 4,000 from holding Beeks Trading or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LOreal SA vs. Beeks Trading
Performance |
| Timeline |
| LOreal SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beeks Trading |
LOreal SA and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOreal SA and Beeks Trading
The main advantage of trading using opposite LOreal SA and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOreal SA position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| LOreal SA vs. Leroy Seafood Group | LOreal SA vs. Amedeo Air Four | LOreal SA vs. Finnair Oyj | LOreal SA vs. Mindflair Plc |
| Beeks Trading vs. Edita Food Industries | Beeks Trading vs. BW Offshore | Beeks Trading vs. Hilton Food Group | Beeks Trading vs. Supermarket Income REIT |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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