Correlation Between Lexibook Linguistic and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SAS, you can compare the effects of market volatilities on Lexibook Linguistic and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Gaztransport Technigaz.
Diversification Opportunities for Lexibook Linguistic and Gaztransport Technigaz
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexibook and Gaztransport is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Lexibook Linguistic and Gaztransport Technigaz
Assuming the 90 days trading horizon Lexibook Linguistic is expected to generate 4.24 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, Lexibook Linguistic Electronic is 4.5 times less risky than Gaztransport Technigaz. It trades about 0.09 of its potential returns per unit of risk. Gaztransport Technigaz SAS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,660 in Gaztransport Technigaz SAS on August 29, 2024 and sell it today you would earn a total of 280.00 from holding Gaztransport Technigaz SAS or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexibook Linguistic Electronic vs. Gaztransport Technigaz SAS
Performance |
| Timeline |
| Lexibook Linguistic |
| Gaztransport Technigaz |
Lexibook Linguistic and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexibook Linguistic and Gaztransport Technigaz
The main advantage of trading using opposite Lexibook Linguistic and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexibook Linguistic position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Lexibook Linguistic vs. SA Catana Group | Lexibook Linguistic vs. Reworld Media | Lexibook Linguistic vs. Biosynex | Lexibook Linguistic vs. Moulinvest |
| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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