Correlation Between Lanakam SA and Avax SA
Can any of the company-specific risk be diversified away by investing in both Lanakam SA and Avax SA 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 Avax SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanakam SA and Avax SA, you can compare the effects of market volatilities on Lanakam SA and Avax SA 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 Avax SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanakam SA and Avax SA.
Diversification Opportunities for Lanakam SA and Avax SA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lanakam and Avax is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lanakam SA and Avax SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avax SA 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 Avax SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avax SA has no effect on the direction of Lanakam SA i.e., Lanakam SA and Avax SA go up and down completely randomly.
Pair Corralation between Lanakam SA and Avax SA
Assuming the 90 days trading horizon Lanakam SA is expected to generate 3.02 times less return on investment than Avax SA. In addition to that, Lanakam SA is 1.18 times more volatile than Avax SA. It trades about 0.02 of its total potential returns per unit of risk. Avax SA is currently generating about 0.07 per unit of volatility. If you would invest 87.00 in Avax SA on October 25, 2024 and sell it today you would earn a total of 95.00 from holding Avax SA or generate 109.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanakam SA vs. Avax SA
Performance |
| Timeline |
| Lanakam SA |
| Avax SA |
Lanakam SA and Avax SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanakam SA and Avax SA
The main advantage of trading using opposite Lanakam SA and Avax SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanakam SA position performs unexpectedly, Avax SA 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 Avax SA will offset losses from the drop in Avax SA's long position.| Lanakam SA vs. Intertech SA Inter | Lanakam SA vs. National Bank of | Lanakam SA vs. Athens Medical CSA | Lanakam SA vs. Profile Systems Software |
| Avax SA vs. Ellaktor SA | Avax SA vs. GEK TERNA Holdings | Avax SA vs. LAMDA Development SA | Avax SA vs. Public Power |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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