Correlation Between Ramsay Generale and Lumibird
Can any of the company-specific risk be diversified away by investing in both Ramsay Generale and Lumibird 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 Ramsay Generale and Lumibird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramsay Generale De and Lumibird SA, you can compare the effects of market volatilities on Ramsay Generale and Lumibird 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 Ramsay Generale with a short position of Lumibird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Generale and Lumibird.
Diversification Opportunities for Ramsay Generale and Lumibird
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ramsay and Lumibird is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Generale De and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Ramsay Generale 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 Ramsay Generale De are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Ramsay Generale i.e., Ramsay Generale and Lumibird go up and down completely randomly.
Pair Corralation between Ramsay Generale and Lumibird
Assuming the 90 days trading horizon Ramsay Generale De is expected to under-perform the Lumibird. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Generale De is 1.43 times less risky than Lumibird. The stock trades about -0.05 of its potential returns per unit of risk. The Lumibird SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Lumibird SA on August 30, 2024 and sell it today you would lose (606.00) from holding Lumibird SA or give up 39.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Generale De vs. Lumibird SA
Performance |
| Timeline |
| Ramsay Generale De |
| Lumibird SA |
Ramsay Generale and Lumibird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Generale and Lumibird
The main advantage of trading using opposite Ramsay Generale and Lumibird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Generale position performs unexpectedly, Lumibird 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 Lumibird will offset losses from the drop in Lumibird's long position.| Ramsay Generale vs. Bonduelle SCA | Ramsay Generale vs. Mtropole Tlvision SA | Ramsay Generale vs. JC Decaux SA | Ramsay Generale vs. Bnteau SA |
| Lumibird vs. Aubay Socit Anonyme | Lumibird vs. Infotel SA | Lumibird vs. IT Link | Lumibird vs. Manitou BF SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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