Correlation Between Laureate Education and NEXANS
Can any of the company-specific risk be diversified away by investing in both Laureate Education and NEXANS 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 Laureate Education and NEXANS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and NEXANS, you can compare the effects of market volatilities on Laureate Education and NEXANS 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 Laureate Education with a short position of NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and NEXANS.
Diversification Opportunities for Laureate Education and NEXANS
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Laureate and NEXANS is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS and Laureate Education 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 Laureate Education are associated (or correlated) with NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of Laureate Education i.e., Laureate Education and NEXANS go up and down completely randomly.
Pair Corralation between Laureate Education and NEXANS
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.83 times more return on investment than NEXANS. However, Laureate Education is 1.21 times less risky than NEXANS. It trades about -0.03 of its potential returns per unit of risk. NEXANS is currently generating about -0.16 per unit of risk. If you would invest 1,790 in Laureate Education on September 21, 2024 and sell it today you would lose (20.00) from holding Laureate Education or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Laureate Education vs. NEXANS
Performance |
| Timeline |
| Laureate Education |
| NEXANS |
Laureate Education and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and NEXANS
The main advantage of trading using opposite Laureate Education and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| Laureate Education vs. IDP EDUCATION LTD | Laureate Education vs. Superior Plus Corp | Laureate Education vs. SIVERS SEMICONDUCTORS AB | Laureate Education vs. Norsk Hydro ASA |
| NEXANS vs. AEGEAN AIRLINES | NEXANS vs. DALATA HOTEL | NEXANS vs. Pebblebrook Hotel Trust | NEXANS vs. Meli Hotels International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |