Correlation Between Wedia SA and Lectra SA
Can any of the company-specific risk be diversified away by investing in both Wedia SA 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 Wedia SA and Lectra SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wedia SA and Lectra SA, you can compare the effects of market volatilities on Wedia SA 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 Wedia SA with a short position of Lectra SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wedia SA and Lectra SA.
Diversification Opportunities for Wedia SA and Lectra SA
Excellent diversification
The 3 months correlation between Wedia and Lectra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wedia SA and Lectra SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lectra SA and Wedia SA 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 Wedia 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 Wedia SA i.e., Wedia SA and Lectra SA go up and down completely randomly.
Pair Corralation between Wedia SA and Lectra SA
If you would invest 2,475 in Lectra SA on August 30, 2024 and sell it today you would earn a total of 325.00 from holding Lectra SA or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wedia SA vs. Lectra SA
Performance |
| Timeline |
| Wedia SA |
| Lectra SA |
Wedia SA and Lectra SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wedia SA and Lectra SA
The main advantage of trading using opposite Wedia SA and Lectra SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wedia SA 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.The idea behind Wedia SA and Lectra 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.| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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