Correlation Between Lexibook Linguistic and Air France
Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Air France 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 Lexibook Linguistic and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexibook Linguistic Electronic and Air France KLM SA, you can compare the effects of market volatilities on Lexibook Linguistic and Air France 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 Lexibook Linguistic with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Air France.
Diversification Opportunities for Lexibook Linguistic and Air France
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lexibook and Air is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Lexibook Linguistic 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 Lexibook Linguistic Electronic are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Air France go up and down completely randomly.
Pair Corralation between Lexibook Linguistic and Air France
Assuming the 90 days trading horizon Lexibook Linguistic is expected to generate 10.21 times less return on investment than Air France. But when comparing it to its historical volatility, Lexibook Linguistic Electronic is 7.56 times less risky than Air France. It trades about 0.08 of its potential returns per unit of risk. Air France KLM SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 761.00 in Air France KLM SA on September 19, 2024 and sell it today you would earn a total of 37.00 from holding Air France KLM SA or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexibook Linguistic Electronic vs. Air France KLM SA
Performance |
| Timeline |
| Lexibook Linguistic |
| Air France KLM |
Lexibook Linguistic and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexibook Linguistic and Air France
The main advantage of trading using opposite Lexibook Linguistic and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexibook Linguistic position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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