Correlation Between Lem Holding and Groupe Minoteries
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Groupe Minoteries 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 Groupe Minoteries 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 Groupe Minoteries SA, you can compare the effects of market volatilities on Lem Holding and Groupe Minoteries 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 Groupe Minoteries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Groupe Minoteries.
Diversification Opportunities for Lem Holding and Groupe Minoteries
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lem and Groupe is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Groupe Minoteries SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Minoteries 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 Groupe Minoteries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Minoteries has no effect on the direction of Lem Holding i.e., Lem Holding and Groupe Minoteries go up and down completely randomly.
Pair Corralation between Lem Holding and Groupe Minoteries
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Groupe Minoteries. In addition to that, Lem Holding is 3.25 times more volatile than Groupe Minoteries SA. It trades about -0.31 of its total potential returns per unit of risk. Groupe Minoteries SA is currently generating about 0.18 per unit of volatility. If you would invest 22,600 in Groupe Minoteries SA on September 4, 2024 and sell it today you would earn a total of 1,400 from holding Groupe Minoteries SA or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lem Holding SA vs. Groupe Minoteries SA
Performance |
| Timeline |
| Lem Holding SA |
| Groupe Minoteries |
Lem Holding and Groupe Minoteries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lem Holding and Groupe Minoteries
The main advantage of trading using opposite Lem Holding and Groupe Minoteries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Groupe Minoteries 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 Groupe Minoteries will offset losses from the drop in Groupe Minoteries' long position.| Lem Holding vs. Inficon Holding | Lem Holding vs. Belimo Holding | Lem Holding vs. Interroll Holding AG | Lem Holding vs. Comet Holding AG |
| Groupe Minoteries vs. Carlo Gavazzi Holding | Groupe Minoteries vs. Emmi AG | Groupe Minoteries vs. Cicor Technologies | Groupe Minoteries vs. Lem Holding 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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