Correlation Between INAQ Old and L Catterton
Can any of the company-specific risk be diversified away by investing in both INAQ Old and L Catterton 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 INAQ Old and L Catterton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INAQ Old and L Catterton Asia, you can compare the effects of market volatilities on INAQ Old and L Catterton 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 INAQ Old with a short position of L Catterton. Check out your portfolio center. Please also check ongoing floating volatility patterns of INAQ Old and L Catterton.
Diversification Opportunities for INAQ Old and L Catterton
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INAQ and LCAA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding INAQ Old and L Catterton Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Catterton Asia and INAQ Old 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 INAQ Old are associated (or correlated) with L Catterton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Catterton Asia has no effect on the direction of INAQ Old i.e., INAQ Old and L Catterton go up and down completely randomly.
Pair Corralation between INAQ Old and L Catterton
If you would invest 1,050 in L Catterton Asia on November 4, 2024 and sell it today you would earn a total of 0.00 from holding L Catterton Asia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INAQ Old vs. L Catterton Asia
Performance |
| Timeline |
| INAQ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
INAQ Old and L Catterton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INAQ Old and L Catterton
The main advantage of trading using opposite INAQ Old and L Catterton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INAQ Old position performs unexpectedly, L Catterton 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 L Catterton will offset losses from the drop in L Catterton's long position.The idea behind INAQ Old and L Catterton Asia 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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