Correlation Between DocuSign and Lonza Group
Can any of the company-specific risk be diversified away by investing in both DocuSign and Lonza Group 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 DocuSign and Lonza Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DocuSign and Lonza Group AG, you can compare the effects of market volatilities on DocuSign and Lonza Group 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 DocuSign with a short position of Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DocuSign and Lonza Group.
Diversification Opportunities for DocuSign and Lonza Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DocuSign and Lonza is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding DocuSign and Lonza Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group AG and DocuSign 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 DocuSign are associated (or correlated) with Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group AG has no effect on the direction of DocuSign i.e., DocuSign and Lonza Group go up and down completely randomly.
Pair Corralation between DocuSign and Lonza Group
Given the investment horizon of 90 days DocuSign is expected to generate 1.23 times more return on investment than Lonza Group. However, DocuSign is 1.23 times more volatile than Lonza Group AG. It trades about 0.04 of its potential returns per unit of risk. Lonza Group AG is currently generating about 0.03 per unit of risk. If you would invest 5,803 in DocuSign on September 3, 2024 and sell it today you would earn a total of 2,166 from holding DocuSign or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DocuSign vs. Lonza Group AG
Performance |
| Timeline |
| DocuSign |
| Lonza Group AG |
DocuSign and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DocuSign and Lonza Group
The main advantage of trading using opposite DocuSign and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DocuSign position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.The idea behind DocuSign and Lonza Group AG 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.| Lonza Group vs. Neuronetics | Lonza Group vs. Intelligent Bio Solutions | Lonza Group vs. Biodesix | Lonza Group vs. Precipio |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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