Correlation Between Eat Beyond and Lisi SA
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and Lisi 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 Eat Beyond and Lisi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eat Beyond Global and Lisi SA, you can compare the effects of market volatilities on Eat Beyond and Lisi 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 Eat Beyond with a short position of Lisi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and Lisi SA.
Diversification Opportunities for Eat Beyond and Lisi SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eat and Lisi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and Lisi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisi SA and Eat Beyond 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 Eat Beyond Global are associated (or correlated) with Lisi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisi SA has no effect on the direction of Eat Beyond i.e., Eat Beyond and Lisi SA go up and down completely randomly.
Pair Corralation between Eat Beyond and Lisi SA
Assuming the 90 days horizon Eat Beyond Global is expected to generate 51.43 times more return on investment than Lisi SA. However, Eat Beyond is 51.43 times more volatile than Lisi SA. It trades about 0.21 of its potential returns per unit of risk. Lisi SA is currently generating about -0.22 per unit of risk. If you would invest 3.20 in Eat Beyond Global on September 1, 2024 and sell it today you would earn a total of 3.40 from holding Eat Beyond Global or generate 106.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eat Beyond Global vs. Lisi SA
Performance |
| Timeline |
| Eat Beyond Global |
| Lisi SA |
Eat Beyond and Lisi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and Lisi SA
The main advantage of trading using opposite Eat Beyond and Lisi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, Lisi 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 Lisi SA will offset losses from the drop in Lisi SA's long position.| Eat Beyond vs. Elysee Development Corp | Eat Beyond vs. Azimut Holding SpA | Eat Beyond vs. Ameritrans Capital Corp | Eat Beyond vs. Aimia Inc |
| Lisi SA vs. Curtiss Wright | Lisi SA vs. Mercury Systems | Lisi SA vs. AAR Corp | Lisi SA vs. Ducommun Incorporated |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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