Correlation Between Lavipharm and Intertech
Can any of the company-specific risk be diversified away by investing in both Lavipharm and Intertech 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 Lavipharm and Intertech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lavipharm SA and Intertech SA Inter, you can compare the effects of market volatilities on Lavipharm and Intertech 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 Lavipharm with a short position of Intertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavipharm and Intertech.
Diversification Opportunities for Lavipharm and Intertech
Very poor diversification
The 3 months correlation between Lavipharm and Intertech is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lavipharm SA and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter and Lavipharm 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 Lavipharm SA are associated (or correlated) with Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of Lavipharm i.e., Lavipharm and Intertech go up and down completely randomly.
Pair Corralation between Lavipharm and Intertech
Assuming the 90 days trading horizon Lavipharm SA is expected to under-perform the Intertech. But the stock apears to be less risky and, when comparing its historical volatility, Lavipharm SA is 1.32 times less risky than Intertech. The stock trades about -0.15 of its potential returns per unit of risk. The Intertech SA Inter is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Intertech SA Inter on September 3, 2024 and sell it today you would lose (20.00) from holding Intertech SA Inter or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lavipharm SA vs. Intertech SA Inter
Performance |
| Timeline |
| Lavipharm SA |
| Intertech SA Inter |
Lavipharm and Intertech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lavipharm and Intertech
The main advantage of trading using opposite Lavipharm and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavipharm position performs unexpectedly, Intertech 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 Intertech will offset losses from the drop in Intertech's long position.| Lavipharm vs. Intertech SA Inter | Lavipharm vs. Optronics Technologies SA | Lavipharm vs. Profile Systems Software | Lavipharm vs. Thrace Plastics Holding |
| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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