Correlation Between Innelec Multimedia and Lexibook Linguistic
Can any of the company-specific risk be diversified away by investing in both Innelec Multimedia and Lexibook Linguistic 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 Innelec Multimedia and Lexibook Linguistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innelec Multimedia and Lexibook Linguistic Electronic, you can compare the effects of market volatilities on Innelec Multimedia and Lexibook Linguistic 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 Innelec Multimedia with a short position of Lexibook Linguistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innelec Multimedia and Lexibook Linguistic.
Diversification Opportunities for Innelec Multimedia and Lexibook Linguistic
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Innelec and Lexibook is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Innelec Multimedia and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic and Innelec Multimedia 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 Innelec Multimedia are associated (or correlated) with Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of Innelec Multimedia i.e., Innelec Multimedia and Lexibook Linguistic go up and down completely randomly.
Pair Corralation between Innelec Multimedia and Lexibook Linguistic
Assuming the 90 days trading horizon Innelec Multimedia is expected to under-perform the Lexibook Linguistic. But the stock apears to be less risky and, when comparing its historical volatility, Innelec Multimedia is 3.87 times less risky than Lexibook Linguistic. The stock trades about -0.25 of its potential returns per unit of risk. The Lexibook Linguistic Electronic is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Lexibook Linguistic Electronic on November 9, 2024 and sell it today you would earn a total of 96.00 from holding Lexibook Linguistic Electronic or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innelec Multimedia vs. Lexibook Linguistic Electronic
Performance |
| Timeline |
| Innelec Multimedia |
| Lexibook Linguistic |
Innelec Multimedia and Lexibook Linguistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innelec Multimedia and Lexibook Linguistic
The main advantage of trading using opposite Innelec Multimedia and Lexibook Linguistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innelec Multimedia position performs unexpectedly, Lexibook Linguistic 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 Lexibook Linguistic will offset losses from the drop in Lexibook Linguistic's long position.| Innelec Multimedia vs. Lacroix Group SA | Innelec Multimedia vs. Damartex | Innelec Multimedia vs. BigBen Interactive |
| Lexibook Linguistic vs. SA Catana Group | Lexibook Linguistic vs. Reworld Media | Lexibook Linguistic vs. Biosynex | Lexibook Linguistic vs. Moulinvest |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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