Correlation Between Methanor and Lectricite
Can any of the company-specific risk be diversified away by investing in both Methanor and Lectricite 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 Methanor and Lectricite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methanor and lectricite de Strasbourg, you can compare the effects of market volatilities on Methanor and Lectricite 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 Methanor with a short position of Lectricite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methanor and Lectricite.
Diversification Opportunities for Methanor and Lectricite
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Methanor and Lectricite is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Methanor and lectricite de Strasbourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on lectricite de Strasbourg and Methanor 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 Methanor are associated (or correlated) with Lectricite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of lectricite de Strasbourg has no effect on the direction of Methanor i.e., Methanor and Lectricite go up and down completely randomly.
Pair Corralation between Methanor and Lectricite
Assuming the 90 days trading horizon Methanor is expected to under-perform the Lectricite. In addition to that, Methanor is 3.33 times more volatile than lectricite de Strasbourg. It trades about -0.06 of its total potential returns per unit of risk. lectricite de Strasbourg is currently generating about 0.01 per unit of volatility. If you would invest 11,018 in lectricite de Strasbourg on August 29, 2024 and sell it today you would earn a total of 132.00 from holding lectricite de Strasbourg or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methanor vs. lectricite de Strasbourg
Performance |
| Timeline |
| Methanor |
| lectricite de Strasbourg |
Methanor and Lectricite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methanor and Lectricite
The main advantage of trading using opposite Methanor and Lectricite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methanor position performs unexpectedly, Lectricite 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 Lectricite will offset losses from the drop in Lectricite's long position.| Methanor vs. Neurones | Methanor vs. Aubay Socit Anonyme | Methanor vs. Infotel SA | Methanor vs. Manitou BF SA |
| Lectricite vs. Thermador Groupe SA | Lectricite vs. Burelle SA | Lectricite vs. Interparfums SA | Lectricite vs. Societe LDC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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