Correlation Between Intertech and Lavipharm
Can any of the company-specific risk be diversified away by investing in both Intertech and Lavipharm 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 Lavipharm 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 Lavipharm SA, you can compare the effects of market volatilities on Intertech and Lavipharm 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 Lavipharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertech and Lavipharm.
Diversification Opportunities for Intertech and Lavipharm
Very poor diversification
The 3 months correlation between Intertech and Lavipharm is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter and Lavipharm SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavipharm 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 Lavipharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavipharm SA has no effect on the direction of Intertech i.e., Intertech and Lavipharm go up and down completely randomly.
Pair Corralation between Intertech and Lavipharm
Assuming the 90 days trading horizon Intertech SA Inter is expected to generate 1.22 times more return on investment than Lavipharm. However, Intertech is 1.22 times more volatile than Lavipharm SA. It trades about 0.08 of its potential returns per unit of risk. Lavipharm SA is currently generating about -0.05 per unit of risk. If you would invest 101.00 in Intertech SA Inter on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Intertech SA Inter or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertech SA Inter vs. Lavipharm SA
Performance |
| Timeline |
| Intertech SA Inter |
| Lavipharm SA |
Intertech and Lavipharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertech and Lavipharm
The main advantage of trading using opposite Intertech and Lavipharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertech position performs unexpectedly, Lavipharm 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 Lavipharm will offset losses from the drop in Lavipharm's long position.| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power |
| Lavipharm vs. Intertech SA Inter | Lavipharm vs. Optronics Technologies SA | Lavipharm vs. Profile Systems Software | Lavipharm vs. Thrace Plastics Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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