Correlation Between LAMDA Development and Karelia Tobacco
Can any of the company-specific risk be diversified away by investing in both LAMDA Development and Karelia Tobacco 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 LAMDA Development and Karelia Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAMDA Development SA and Karelia Tobacco, you can compare the effects of market volatilities on LAMDA Development and Karelia Tobacco 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 LAMDA Development with a short position of Karelia Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAMDA Development and Karelia Tobacco.
Diversification Opportunities for LAMDA Development and Karelia Tobacco
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAMDA and Karelia is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LAMDA Development SA and Karelia Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karelia Tobacco and LAMDA Development 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 LAMDA Development SA are associated (or correlated) with Karelia Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karelia Tobacco has no effect on the direction of LAMDA Development i.e., LAMDA Development and Karelia Tobacco go up and down completely randomly.
Pair Corralation between LAMDA Development and Karelia Tobacco
Assuming the 90 days trading horizon LAMDA Development SA is expected to generate 1.02 times more return on investment than Karelia Tobacco. However, LAMDA Development is 1.02 times more volatile than Karelia Tobacco. It trades about -0.07 of its potential returns per unit of risk. Karelia Tobacco is currently generating about -0.18 per unit of risk. If you would invest 695.00 in LAMDA Development SA on November 27, 2024 and sell it today you would lose (15.00) from holding LAMDA Development SA or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAMDA Development SA vs. Karelia Tobacco
Performance |
| Timeline |
| LAMDA Development |
| Karelia Tobacco |
LAMDA Development and Karelia Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAMDA Development and Karelia Tobacco
The main advantage of trading using opposite LAMDA Development and Karelia Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAMDA Development position performs unexpectedly, Karelia Tobacco 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 Karelia Tobacco will offset losses from the drop in Karelia Tobacco's long position.| LAMDA Development vs. Eurobank Ergasias Services | LAMDA Development vs. Foodlink AE | LAMDA Development vs. CPI Computer Peripherals | LAMDA Development vs. Sidma SA Steel |
| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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