Correlation Between Lexibook Linguistic and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Les Hotels 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 Les Hotels 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 Les Hotels Bav, you can compare the effects of market volatilities on Lexibook Linguistic and Les Hotels 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 Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Les Hotels.
Diversification Opportunities for Lexibook Linguistic and Les Hotels
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexibook and Les is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav 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 Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Les Hotels go up and down completely randomly.
Pair Corralation between Lexibook Linguistic and Les Hotels
Assuming the 90 days trading horizon Lexibook Linguistic Electronic is expected to generate 1.35 times more return on investment than Les Hotels. However, Lexibook Linguistic is 1.35 times more volatile than Les Hotels Bav. It trades about 0.06 of its potential returns per unit of risk. Les Hotels Bav is currently generating about 0.04 per unit of risk. If you would invest 260.00 in Lexibook Linguistic Electronic on October 23, 2024 and sell it today you would earn a total of 194.00 from holding Lexibook Linguistic Electronic or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.82% |
| Values | Daily Returns |
Lexibook Linguistic Electronic vs. Les Hotels Bav
Performance |
| Timeline |
| Lexibook Linguistic |
| Les Hotels Bav |
Lexibook Linguistic and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexibook Linguistic and Les Hotels
The main advantage of trading using opposite Lexibook Linguistic and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexibook Linguistic position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Lexibook Linguistic vs. SA Catana Group | Lexibook Linguistic vs. Reworld Media | Lexibook Linguistic vs. Biosynex | Lexibook Linguistic vs. Moulinvest |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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