Correlation Between Eurocastle Investment and Lavide Holding
Can any of the company-specific risk be diversified away by investing in both Eurocastle Investment and Lavide Holding 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 Eurocastle Investment and Lavide Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurocastle Investment and Lavide Holding NV, you can compare the effects of market volatilities on Eurocastle Investment and Lavide Holding 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 Eurocastle Investment with a short position of Lavide Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurocastle Investment and Lavide Holding.
Diversification Opportunities for Eurocastle Investment and Lavide Holding
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eurocastle and Lavide is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eurocastle Investment and Lavide Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavide Holding NV and Eurocastle Investment 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 Eurocastle Investment are associated (or correlated) with Lavide Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavide Holding NV has no effect on the direction of Eurocastle Investment i.e., Eurocastle Investment and Lavide Holding go up and down completely randomly.
Pair Corralation between Eurocastle Investment and Lavide Holding
Assuming the 90 days trading horizon Eurocastle Investment is expected to under-perform the Lavide Holding. But the stock apears to be less risky and, when comparing its historical volatility, Eurocastle Investment is 1.61 times less risky than Lavide Holding. The stock trades about -0.07 of its potential returns per unit of risk. The Lavide Holding NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Lavide Holding NV on August 27, 2024 and sell it today you would earn a total of 7.00 from holding Lavide Holding NV or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 35.26% |
| Values | Daily Returns |
Eurocastle Investment vs. Lavide Holding NV
Performance |
| Timeline |
| Eurocastle Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lavide Holding NV |
Eurocastle Investment and Lavide Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurocastle Investment and Lavide Holding
The main advantage of trading using opposite Eurocastle Investment and Lavide Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurocastle Investment position performs unexpectedly, Lavide Holding 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 Lavide Holding will offset losses from the drop in Lavide Holding's long position.| Eurocastle Investment vs. Tetragon Financial Group | Eurocastle Investment vs. Ctac NV | Eurocastle Investment vs. BlackRock ESG Multi Asset | Eurocastle Investment vs. Aalberts Industries NV |
| Lavide Holding vs. AMG Advanced Metallurgical | Lavide Holding vs. SBM Offshore NV | Lavide Holding vs. Vastned Retail NV | Lavide Holding vs. BE Semiconductor Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |