Correlation Between Lanakam SA and Wool Industry
Can any of the company-specific risk be diversified away by investing in both Lanakam SA and Wool Industry 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 Lanakam SA and Wool Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanakam SA and Wool Industry Tria, you can compare the effects of market volatilities on Lanakam SA and Wool Industry 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 Lanakam SA with a short position of Wool Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanakam SA and Wool Industry.
Diversification Opportunities for Lanakam SA and Wool Industry
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lanakam and Wool is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lanakam SA and Wool Industry Tria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wool Industry Tria and Lanakam 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 Lanakam SA are associated (or correlated) with Wool Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wool Industry Tria has no effect on the direction of Lanakam SA i.e., Lanakam SA and Wool Industry go up and down completely randomly.
Pair Corralation between Lanakam SA and Wool Industry
Assuming the 90 days trading horizon Lanakam SA is expected to generate 0.6 times more return on investment than Wool Industry. However, Lanakam SA is 1.65 times less risky than Wool Industry. It trades about -0.01 of its potential returns per unit of risk. Wool Industry Tria is currently generating about -0.02 per unit of risk. If you would invest 102.00 in Lanakam SA on November 9, 2024 and sell it today you would lose (9.00) from holding Lanakam SA or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.97% |
| Values | Daily Returns |
Lanakam SA vs. Wool Industry Tria
Performance |
| Timeline |
| Lanakam SA |
Risk-Adjusted Performance
Solid
Weak | Strong |
| Wool Industry Tria |
Lanakam SA and Wool Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanakam SA and Wool Industry
The main advantage of trading using opposite Lanakam SA and Wool Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanakam SA position performs unexpectedly, Wool Industry 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 Wool Industry will offset losses from the drop in Wool Industry's long position.| Lanakam SA vs. General Commercial Industrial | Lanakam SA vs. Profile Systems Software | Lanakam SA vs. Hellenic Telecommunications Organization | Lanakam SA vs. Eurobank Ergasias Services |
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 Stocks Directory module to find actively traded stocks across global markets.
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