Correlation Between Allfunds and Lavide Holding
Can any of the company-specific risk be diversified away by investing in both Allfunds and Lavide Holding 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 Allfunds and Lavide Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allfunds Group and Lavide Holding NV, you can compare the effects of market volatilities on Allfunds and Lavide Holding 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 Allfunds with a short position of Lavide Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allfunds and Lavide Holding.
Diversification Opportunities for Allfunds and Lavide Holding
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allfunds and Lavide is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and Lavide Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavide Holding NV and Allfunds 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 Allfunds Group are associated (or correlated) with Lavide Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavide Holding NV has no effect on the direction of Allfunds i.e., Allfunds and Lavide Holding go up and down completely randomly.
Pair Corralation between Allfunds and Lavide Holding
Assuming the 90 days trading horizon Allfunds Group is expected to under-perform the Lavide Holding. But the stock apears to be less risky and, when comparing its historical volatility, Allfunds Group is 2.57 times less risky than Lavide Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Lavide Holding NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Lavide Holding NV on September 2, 2024 and sell it today you would lose (2.00) from holding Lavide Holding NV or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.66% |
| Values | Daily Returns |
Allfunds Group vs. Lavide Holding NV
Performance |
| Timeline |
| Allfunds Group |
| Lavide Holding NV |
Allfunds and Lavide Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allfunds and Lavide Holding
The main advantage of trading using opposite Allfunds and Lavide Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allfunds position performs unexpectedly, Lavide Holding 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 Lavide Holding will offset losses from the drop in Lavide Holding's long position.| Allfunds vs. Pershing Square Holdings | Allfunds vs. Universal Music Group | Allfunds vs. Hydratec Industries NV | Allfunds vs. BlackRock ESG Multi Asset |
| Lavide Holding vs. Sligro Food Group | Lavide Holding vs. AMG Advanced Metallurgical | Lavide Holding vs. Tetragon Financial Group | Lavide Holding vs. Allfunds Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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