Correlation Between Lem Holding and Cicor Technologies
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Cicor Technologies 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 Cicor Technologies 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 Cicor Technologies, you can compare the effects of market volatilities on Lem Holding and Cicor Technologies 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 Cicor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Cicor Technologies.
Diversification Opportunities for Lem Holding and Cicor Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lem and Cicor is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Cicor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicor Technologies 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 Cicor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicor Technologies has no effect on the direction of Lem Holding i.e., Lem Holding and Cicor Technologies go up and down completely randomly.
Pair Corralation between Lem Holding and Cicor Technologies
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Cicor Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Lem Holding SA is 1.45 times less risky than Cicor Technologies. The stock trades about -0.35 of its potential returns per unit of risk. The Cicor Technologies is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Cicor Technologies on December 24, 2024 and sell it today you would earn a total of 2,800 from holding Cicor Technologies or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lem Holding SA vs. Cicor Technologies
Performance |
| Timeline |
| Lem Holding SA |
| Cicor Technologies |
Lem Holding and Cicor Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lem Holding and Cicor Technologies
The main advantage of trading using opposite Lem Holding and Cicor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Cicor Technologies 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 Cicor Technologies will offset losses from the drop in Cicor Technologies' long position.| Lem Holding vs. Inficon Holding | Lem Holding vs. Belimo Holding | Lem Holding vs. Interroll Holding AG | Lem Holding vs. Comet Holding AG |
| Cicor Technologies vs. Comet Holding AG | Cicor Technologies vs. Also Holding AG | Cicor Technologies vs. Komax Holding AG | Cicor Technologies vs. Bucher Industries 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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