Correlation Between Labiana Health and Nueva Expresin
Can any of the company-specific risk be diversified away by investing in both Labiana Health and Nueva Expresin 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 Labiana Health and Nueva Expresin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labiana Health SA and Nueva Expresin Textil, you can compare the effects of market volatilities on Labiana Health and Nueva Expresin 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 Labiana Health with a short position of Nueva Expresin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labiana Health and Nueva Expresin.
Diversification Opportunities for Labiana Health and Nueva Expresin
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Labiana and Nueva is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Labiana Health SA and Nueva Expresin Textil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nueva Expresin Textil and Labiana Health 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 Labiana Health SA are associated (or correlated) with Nueva Expresin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nueva Expresin Textil has no effect on the direction of Labiana Health i.e., Labiana Health and Nueva Expresin go up and down completely randomly.
Pair Corralation between Labiana Health and Nueva Expresin
Assuming the 90 days trading horizon Labiana Health SA is expected to generate 1.57 times more return on investment than Nueva Expresin. However, Labiana Health is 1.57 times more volatile than Nueva Expresin Textil. It trades about -0.08 of its potential returns per unit of risk. Nueva Expresin Textil is currently generating about -0.18 per unit of risk. If you would invest 228.00 in Labiana Health SA on September 1, 2024 and sell it today you would lose (18.00) from holding Labiana Health SA or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labiana Health SA vs. Nueva Expresin Textil
Performance |
| Timeline |
| Labiana Health SA |
| Nueva Expresin Textil |
Labiana Health and Nueva Expresin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labiana Health and Nueva Expresin
The main advantage of trading using opposite Labiana Health and Nueva Expresin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labiana Health position performs unexpectedly, Nueva Expresin 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 Nueva Expresin will offset losses from the drop in Nueva Expresin's long position.| Labiana Health vs. Industria de Diseno | Labiana Health vs. Iberdrola SA | Labiana Health vs. Banco Santander | Labiana Health vs. Caixabank SA |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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