Correlation Between Lisi SA and Guerbet S
Can any of the company-specific risk be diversified away by investing in both Lisi SA and Guerbet S 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 Lisi SA and Guerbet S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lisi SA and Guerbet S A, you can compare the effects of market volatilities on Lisi SA and Guerbet S 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 Lisi SA with a short position of Guerbet S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lisi SA and Guerbet S.
Diversification Opportunities for Lisi SA and Guerbet S
Poor diversification
The 3 months correlation between Lisi and Guerbet is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lisi SA and Guerbet S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerbet S A and Lisi 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 Lisi SA are associated (or correlated) with Guerbet S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerbet S A has no effect on the direction of Lisi SA i.e., Lisi SA and Guerbet S go up and down completely randomly.
Pair Corralation between Lisi SA and Guerbet S
Assuming the 90 days trading horizon Lisi SA is expected to generate 0.52 times more return on investment than Guerbet S. However, Lisi SA is 1.91 times less risky than Guerbet S. It trades about -0.36 of its potential returns per unit of risk. Guerbet S A is currently generating about -0.29 per unit of risk. If you would invest 2,650 in Lisi SA on August 30, 2024 and sell it today you would lose (535.00) from holding Lisi SA or give up 20.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lisi SA vs. Guerbet S A
Performance |
| Timeline |
| Lisi SA |
| Guerbet S A |
Lisi SA and Guerbet S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lisi SA and Guerbet S
The main advantage of trading using opposite Lisi SA and Guerbet S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lisi SA position performs unexpectedly, Guerbet S 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 Guerbet S will offset losses from the drop in Guerbet S's long position.The idea behind Lisi SA and Guerbet S A 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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