Correlation Between Esker SA and Lumibird
Can any of the company-specific risk be diversified away by investing in both Esker SA and Lumibird 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 Esker SA and Lumibird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esker SA and Lumibird SA, you can compare the effects of market volatilities on Esker SA and Lumibird 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 Esker SA with a short position of Lumibird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esker SA and Lumibird.
Diversification Opportunities for Esker SA and Lumibird
Pay attention - limited upside
The 3 months correlation between Esker and Lumibird is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Esker 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 Esker SA are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Esker SA i.e., Esker SA and Lumibird go up and down completely randomly.
Pair Corralation between Esker SA and Lumibird
Assuming the 90 days trading horizon Esker SA is expected to generate 0.79 times more return on investment than Lumibird. However, Esker SA is 1.27 times less risky than Lumibird. It trades about 0.06 of its potential returns per unit of risk. Lumibird SA is currently generating about -0.03 per unit of risk. If you would invest 15,720 in Esker SA on September 1, 2024 and sell it today you would earn a total of 10,340 from holding Esker SA or generate 65.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esker SA vs. Lumibird SA
Performance |
| Timeline |
| Esker SA |
| Lumibird SA |
Esker SA and Lumibird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esker SA and Lumibird
The main advantage of trading using opposite Esker SA and Lumibird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA position performs unexpectedly, Lumibird 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 Lumibird will offset losses from the drop in Lumibird's long position.| Esker SA vs. Sartorius Stedim Biotech | Esker SA vs. Lectra SA | Esker SA vs. Teleperformance SE | Esker SA vs. Trigano SA |
| Lumibird vs. Esker SA | Lumibird vs. Xilam Animation | Lumibird vs. Claranova SE | Lumibird vs. Prodways Group SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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