Correlation Between Kruk SA and LSI Software
Can any of the company-specific risk be diversified away by investing in both Kruk SA 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 Kruk SA and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kruk SA and LSI Software SA, you can compare the effects of market volatilities on Kruk SA 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 Kruk SA with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kruk SA and LSI Software.
Diversification Opportunities for Kruk SA and LSI Software
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kruk and LSI is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kruk 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 Kruk 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 Kruk 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 Kruk SA i.e., Kruk SA and LSI Software go up and down completely randomly.
Pair Corralation between Kruk SA and LSI Software
Assuming the 90 days trading horizon Kruk SA is expected to under-perform the LSI Software. But the stock apears to be less risky and, when comparing its historical volatility, Kruk SA is 1.25 times less risky than LSI Software. The stock trades about -0.04 of its potential returns per unit of risk. The LSI Software SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,490 in LSI Software SA on September 3, 2024 and sell it today you would earn a total of 60.00 from holding LSI Software SA or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kruk SA vs. LSI Software SA
Performance |
| Timeline |
| Kruk SA |
| LSI Software SA |
Kruk SA and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kruk SA and LSI Software
The main advantage of trading using opposite Kruk SA and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kruk SA 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.| Kruk SA vs. LSI Software SA | Kruk SA vs. Biztech Konsulting SA | Kruk SA vs. Centrum Finansowe Banku | Kruk SA vs. Play2Chill 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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