Correlation Between Thales SA and Latcore SA
Can any of the company-specific risk be diversified away by investing in both Thales SA and Latcore 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 Thales SA and Latcore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thales SA and Latcore SA, you can compare the effects of market volatilities on Thales SA and Latcore 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 Thales SA with a short position of Latcore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thales SA and Latcore SA.
Diversification Opportunities for Thales SA and Latcore SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thales and Latcore is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Thales SA and Latcore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latcore SA and Thales 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 Thales SA are associated (or correlated) with Latcore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latcore SA has no effect on the direction of Thales SA i.e., Thales SA and Latcore SA go up and down completely randomly.
Pair Corralation between Thales SA and Latcore SA
Assuming the 90 days horizon Thales SA is expected to generate 12.9 times less return on investment than Latcore SA. But when comparing it to its historical volatility, Thales SA is 19.48 times less risky than Latcore SA. It trades about 0.04 of its potential returns per unit of risk. Latcore SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Latcore SA on November 2, 2024 and sell it today you would lose (10.10) from holding Latcore SA or give up 91.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Thales SA vs. Latcore SA
Performance |
| Timeline |
| Thales SA |
| Latcore SA |
Thales SA and Latcore SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thales SA and Latcore SA
The main advantage of trading using opposite Thales SA and Latcore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales SA position performs unexpectedly, Latcore 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 Latcore SA will offset losses from the drop in Latcore SA's long position.| Thales SA vs. Safran SA | Thales SA vs. Dassault Systemes SE | Thales SA vs. Dassault Aviation SA | Thales SA vs. Vinci SA |
| Latcore SA vs. Derichebourg | Latcore SA vs. Casino Guichard Perrachon | Latcore SA vs. Etablissements Maurel et |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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