Correlation Between Gremi Media and LSI Software
Can any of the company-specific risk be diversified away by investing in both Gremi Media and LSI Software 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 Gremi Media and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gremi Media SA and LSI Software SA, you can compare the effects of market volatilities on Gremi Media and LSI Software 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 Gremi Media with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gremi Media and LSI Software.
Diversification Opportunities for Gremi Media and LSI Software
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gremi and LSI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gremi Media SA and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA and Gremi Media 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 Gremi Media SA are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of Gremi Media i.e., Gremi Media and LSI Software go up and down completely randomly.
Pair Corralation between Gremi Media and LSI Software
Assuming the 90 days trading horizon Gremi Media SA is expected to under-perform the LSI Software. In addition to that, Gremi Media is 2.84 times more volatile than LSI Software SA. It trades about -0.09 of its total potential returns per unit of risk. LSI Software SA is currently generating about 0.05 per unit of volatility. If you would invest 1,096 in LSI Software SA on August 30, 2024 and sell it today you would earn a total of 484.00 from holding LSI Software SA or generate 44.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.4% |
| Values | Daily Returns |
Gremi Media SA vs. LSI Software SA
Performance |
| Timeline |
| Gremi Media SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LSI Software SA |
Gremi Media and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gremi Media and LSI Software
The main advantage of trading using opposite Gremi Media and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gremi Media position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.| Gremi Media vs. Asseco Business Solutions | Gremi Media vs. Detalion Games SA | Gremi Media vs. CFI Holding SA | Gremi Media vs. HM Inwest 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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