Correlation Between Lear and Farmacias Benavides
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By analyzing existing cross correlation between Lear Corporation and Farmacias Benavides SAB, you can compare the effects of market volatilities on Lear and Farmacias Benavides 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 Lear with a short position of Farmacias Benavides. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lear and Farmacias Benavides.
Diversification Opportunities for Lear and Farmacias Benavides
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lear and Farmacias is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lear Corp. and Farmacias Benavides SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmacias Benavides SAB and Lear 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 Lear Corporation are associated (or correlated) with Farmacias Benavides. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmacias Benavides SAB has no effect on the direction of Lear i.e., Lear and Farmacias Benavides go up and down completely randomly.
Pair Corralation between Lear and Farmacias Benavides
If you would invest 2,300 in Farmacias Benavides SAB on November 30, 2024 and sell it today you would earn a total of 0.00 from holding Farmacias Benavides SAB or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lear Corp. vs. Farmacias Benavides SAB
Performance |
Timeline |
Lear |
Farmacias Benavides SAB |
Lear and Farmacias Benavides Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lear and Farmacias Benavides
The main advantage of trading using opposite Lear and Farmacias Benavides positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lear position performs unexpectedly, Farmacias Benavides 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 Farmacias Benavides will offset losses from the drop in Farmacias Benavides' long position.The idea behind Lear Corporation and Farmacias Benavides SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Farmacias Benavides vs. Grupo Sports World | ||
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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