Correlation Between Poulaillon and Lectra SA
Can any of the company-specific risk be diversified away by investing in both Poulaillon and Lectra SA 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 Poulaillon and Lectra SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poulaillon SA and Lectra SA, you can compare the effects of market volatilities on Poulaillon and Lectra SA 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 Poulaillon with a short position of Lectra SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poulaillon and Lectra SA.
Diversification Opportunities for Poulaillon and Lectra SA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Poulaillon and Lectra is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Poulaillon SA and Lectra SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lectra SA and Poulaillon 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 Poulaillon SA are associated (or correlated) with Lectra SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lectra SA has no effect on the direction of Poulaillon i.e., Poulaillon and Lectra SA go up and down completely randomly.
Pair Corralation between Poulaillon and Lectra SA
Assuming the 90 days trading horizon Poulaillon SA is expected to generate 0.99 times more return on investment than Lectra SA. However, Poulaillon SA is 1.01 times less risky than Lectra SA. It trades about 0.04 of its potential returns per unit of risk. Lectra SA is currently generating about -0.01 per unit of risk. If you would invest 409.00 in Poulaillon SA on August 26, 2024 and sell it today you would earn a total of 146.00 from holding Poulaillon SA or generate 35.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.44% |
| Values | Daily Returns |
Poulaillon SA vs. Lectra SA
Performance |
| Timeline |
| Poulaillon SA |
| Lectra SA |
Poulaillon and Lectra SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poulaillon and Lectra SA
The main advantage of trading using opposite Poulaillon and Lectra SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poulaillon position performs unexpectedly, Lectra SA 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 Lectra SA will offset losses from the drop in Lectra SA's long position.| Poulaillon vs. Piscines Desjoyaux SA | Poulaillon vs. Lectra SA | Poulaillon vs. Cogra 48 Socit | Poulaillon vs. Moulinvest |
| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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