Correlation Between C Bond and Lhyfe SA
Can any of the company-specific risk be diversified away by investing in both C Bond and Lhyfe 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 C Bond and Lhyfe SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Bond Systems and Lhyfe SA, you can compare the effects of market volatilities on C Bond and Lhyfe 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 C Bond with a short position of Lhyfe SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Bond and Lhyfe SA.
Diversification Opportunities for C Bond and Lhyfe SA
Pay attention - limited upside
The 3 months correlation between CBNT and Lhyfe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding C Bond Systems and Lhyfe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lhyfe SA and C Bond 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 C Bond Systems are associated (or correlated) with Lhyfe SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lhyfe SA has no effect on the direction of C Bond i.e., C Bond and Lhyfe SA go up and down completely randomly.
Pair Corralation between C Bond and Lhyfe SA
Given the investment horizon of 90 days C Bond Systems is expected to under-perform the Lhyfe SA. In addition to that, C Bond is 4.35 times more volatile than Lhyfe SA. It trades about -0.04 of its total potential returns per unit of risk. Lhyfe SA is currently generating about -0.06 per unit of volatility. If you would invest 715.00 in Lhyfe SA on September 14, 2024 and sell it today you would lose (243.00) from holding Lhyfe SA or give up 33.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Bond Systems vs. Lhyfe SA
Performance |
| Timeline |
| C Bond Systems |
| Lhyfe SA |
C Bond and Lhyfe SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Bond and Lhyfe SA
The main advantage of trading using opposite C Bond and Lhyfe SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Bond position performs unexpectedly, Lhyfe 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 Lhyfe SA will offset losses from the drop in Lhyfe SA's long position.The idea behind C Bond Systems and Lhyfe 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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