Correlation Between Lanson BCC and Memscap Regpt
Can any of the company-specific risk be diversified away by investing in both Lanson BCC and Memscap Regpt 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 Lanson BCC and Memscap Regpt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanson BCC SA and Memscap Regpt, you can compare the effects of market volatilities on Lanson BCC and Memscap Regpt 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 Lanson BCC with a short position of Memscap Regpt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanson BCC and Memscap Regpt.
Diversification Opportunities for Lanson BCC and Memscap Regpt
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lanson and Memscap is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lanson BCC SA and Memscap Regpt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Memscap Regpt and Lanson BCC 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 Lanson BCC SA are associated (or correlated) with Memscap Regpt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Memscap Regpt has no effect on the direction of Lanson BCC i.e., Lanson BCC and Memscap Regpt go up and down completely randomly.
Pair Corralation between Lanson BCC and Memscap Regpt
Assuming the 90 days trading horizon Lanson BCC SA is expected to generate 0.35 times more return on investment than Memscap Regpt. However, Lanson BCC SA is 2.88 times less risky than Memscap Regpt. It trades about -0.17 of its potential returns per unit of risk. Memscap Regpt is currently generating about -0.14 per unit of risk. If you would invest 4,880 in Lanson BCC SA on September 2, 2024 and sell it today you would lose (1,350) from holding Lanson BCC SA or give up 27.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanson BCC SA vs. Memscap Regpt
Performance |
| Timeline |
| Lanson BCC SA |
| Memscap Regpt |
Lanson BCC and Memscap Regpt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanson BCC and Memscap Regpt
The main advantage of trading using opposite Lanson BCC and Memscap Regpt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanson BCC position performs unexpectedly, Memscap Regpt 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 Memscap Regpt will offset losses from the drop in Memscap Regpt's long position.| Lanson BCC vs. Adocia | Lanson BCC vs. Manitou BF SA | Lanson BCC vs. Ossiam Minimum Variance | Lanson BCC vs. Granite 3x LVMH |
| Memscap Regpt vs. Chargeurs SA | Memscap Regpt vs. Straumann Holding AG | Memscap Regpt vs. Manitou BF SA | Memscap Regpt vs. Amundi Index Solutions |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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