Correlation Between N Leventeris and LAMDA Development
Can any of the company-specific risk be diversified away by investing in both N Leventeris and LAMDA Development 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 N Leventeris and LAMDA Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N Leventeris SA and LAMDA Development SA, you can compare the effects of market volatilities on N Leventeris and LAMDA Development 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 N Leventeris with a short position of LAMDA Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of N Leventeris and LAMDA Development.
Diversification Opportunities for N Leventeris and LAMDA Development
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LEBEP and LAMDA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding N Leventeris SA and LAMDA Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMDA Development and N Leventeris 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 N Leventeris SA are associated (or correlated) with LAMDA Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMDA Development has no effect on the direction of N Leventeris i.e., N Leventeris and LAMDA Development go up and down completely randomly.
Pair Corralation between N Leventeris and LAMDA Development
Assuming the 90 days trading horizon N Leventeris SA is expected to under-perform the LAMDA Development. In addition to that, N Leventeris is 4.63 times more volatile than LAMDA Development SA. It trades about -0.16 of its total potential returns per unit of risk. LAMDA Development SA is currently generating about -0.08 per unit of volatility. If you would invest 740.00 in LAMDA Development SA on September 1, 2024 and sell it today you would lose (21.00) from holding LAMDA Development SA or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
N Leventeris SA vs. LAMDA Development SA
Performance |
| Timeline |
| N Leventeris SA |
| LAMDA Development |
N Leventeris and LAMDA Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N Leventeris and LAMDA Development
The main advantage of trading using opposite N Leventeris and LAMDA Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N Leventeris position performs unexpectedly, LAMDA Development 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 LAMDA Development will offset losses from the drop in LAMDA Development's long position.| N Leventeris vs. Unibios Holdings SA | N Leventeris vs. Intracom Holdings SA | N Leventeris vs. Public Power | N Leventeris vs. Hellenic Petroleum SA |
| LAMDA Development vs. National Bank of | LAMDA Development vs. N Leventeris SA | LAMDA Development vs. Eurobank Ergasias Services | LAMDA Development vs. Vogiatzoglou Systems SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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