Correlation Between Lem Holding and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Belimo Holding 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 Lem Holding and Belimo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lem Holding SA and Belimo Holding, you can compare the effects of market volatilities on Lem Holding and Belimo Holding 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 Lem Holding with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Belimo Holding.
Diversification Opportunities for Lem Holding and Belimo Holding
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lem and Belimo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and Lem Holding 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 Lem Holding SA are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of Lem Holding i.e., Lem Holding and Belimo Holding go up and down completely randomly.
Pair Corralation between Lem Holding and Belimo Holding
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Belimo Holding. In addition to that, Lem Holding is 6.09 times more volatile than Belimo Holding. It trades about -0.3 of its total potential returns per unit of risk. Belimo Holding is currently generating about 0.15 per unit of volatility. If you would invest 57,200 in Belimo Holding on September 1, 2024 and sell it today you would earn a total of 1,750 from holding Belimo Holding or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lem Holding SA vs. Belimo Holding
Performance |
| Timeline |
| Lem Holding SA |
| Belimo Holding |
Lem Holding and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lem Holding and Belimo Holding
The main advantage of trading using opposite Lem Holding and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Belimo Holding 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 Belimo Holding will offset losses from the drop in Belimo Holding's long position.| Lem Holding vs. Inficon Holding | Lem Holding vs. Belimo Holding | Lem Holding vs. Interroll Holding AG | Lem Holding vs. Comet Holding AG |
| Belimo Holding vs. EMS CHEMIE HOLDING AG | Belimo Holding vs. Geberit AG | Belimo Holding vs. VAT Group AG | Belimo Holding vs. Interroll Holding AG |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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