Correlation Between Altheora and Linedata Services
Can any of the company-specific risk be diversified away by investing in both Altheora and Linedata Services 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 Altheora and Linedata Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altheora SA and Linedata Services SA, you can compare the effects of market volatilities on Altheora and Linedata Services 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 Altheora with a short position of Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altheora and Linedata Services.
Diversification Opportunities for Altheora and Linedata Services
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altheora and Linedata is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Altheora SA and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services and Altheora 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 Altheora SA are associated (or correlated) with Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Altheora i.e., Altheora and Linedata Services go up and down completely randomly.
Pair Corralation between Altheora and Linedata Services
Assuming the 90 days trading horizon Altheora SA is expected to under-perform the Linedata Services. In addition to that, Altheora is 2.58 times more volatile than Linedata Services SA. It trades about -0.08 of its total potential returns per unit of risk. Linedata Services SA is currently generating about -0.04 per unit of volatility. If you would invest 8,080 in Linedata Services SA on September 1, 2024 and sell it today you would lose (80.00) from holding Linedata Services SA or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Altheora SA vs. Linedata Services SA
Performance |
| Timeline |
| Altheora SA |
| Linedata Services |
Altheora and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altheora and Linedata Services
The main advantage of trading using opposite Altheora and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altheora position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| Altheora vs. LVMH Mot Hennessy | Altheora vs. LOreal SA | Altheora vs. Hermes International SCA | Altheora vs. Manitou BF SA |
| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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