Correlation Between Intertech and Lanakam SA
Can any of the company-specific risk be diversified away by investing in both Intertech and Lanakam 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 Intertech and Lanakam SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertech SA Inter and Lanakam SA, you can compare the effects of market volatilities on Intertech and Lanakam 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 Intertech with a short position of Lanakam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertech and Lanakam SA.
Diversification Opportunities for Intertech and Lanakam SA
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intertech and Lanakam is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter and Lanakam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanakam SA and Intertech 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 Intertech SA Inter are associated (or correlated) with Lanakam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanakam SA has no effect on the direction of Intertech i.e., Intertech and Lanakam SA go up and down completely randomly.
Pair Corralation between Intertech and Lanakam SA
Assuming the 90 days trading horizon Intertech is expected to generate 1.12 times less return on investment than Lanakam SA. But when comparing it to its historical volatility, Intertech SA Inter is 1.06 times less risky than Lanakam SA. It trades about 0.02 of its potential returns per unit of risk. Lanakam SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Lanakam SA on October 25, 2024 and sell it today you would earn a total of 9.00 from holding Lanakam SA or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertech SA Inter vs. Lanakam SA
Performance |
| Timeline |
| Intertech SA Inter |
| Lanakam SA |
Intertech and Lanakam SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertech and Lanakam SA
The main advantage of trading using opposite Intertech and Lanakam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertech position performs unexpectedly, Lanakam 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 Lanakam SA will offset losses from the drop in Lanakam SA's long position.| Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power | Intertech vs. Hellenic Petroleum SA |
| Lanakam SA vs. Intertech SA Inter | Lanakam SA vs. National Bank of | Lanakam SA vs. Athens Medical CSA | Lanakam SA vs. Profile Systems Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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