Correlation Between Sapmer and Lacroix Group
Can any of the company-specific risk be diversified away by investing in both Sapmer and Lacroix Group 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 Sapmer and Lacroix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapmer and Lacroix Group SA, you can compare the effects of market volatilities on Sapmer and Lacroix Group 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 Sapmer with a short position of Lacroix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapmer and Lacroix Group.
Diversification Opportunities for Sapmer and Lacroix Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sapmer and Lacroix is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sapmer and Lacroix Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lacroix Group SA and Sapmer 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 Sapmer are associated (or correlated) with Lacroix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lacroix Group SA has no effect on the direction of Sapmer i.e., Sapmer and Lacroix Group go up and down completely randomly.
Pair Corralation between Sapmer and Lacroix Group
Assuming the 90 days trading horizon Sapmer is expected to under-perform the Lacroix Group. In addition to that, Sapmer is 4.64 times more volatile than Lacroix Group SA. It trades about -0.06 of its total potential returns per unit of risk. Lacroix Group SA is currently generating about -0.07 per unit of volatility. If you would invest 936.00 in Lacroix Group SA on October 25, 2024 and sell it today you would lose (20.00) from holding Lacroix Group SA or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapmer vs. Lacroix Group SA
Performance |
| Timeline |
| Sapmer |
| Lacroix Group SA |
Sapmer and Lacroix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapmer and Lacroix Group
The main advantage of trading using opposite Sapmer and Lacroix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapmer position performs unexpectedly, Lacroix Group 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 Lacroix Group will offset losses from the drop in Lacroix Group's long position.The idea behind Sapmer and Lacroix Group SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lacroix Group vs. Manitou BF SA | Lacroix Group vs. Jacquet Metal Service | Lacroix Group vs. Mersen SA | Lacroix Group vs. Linedata Services SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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