Correlation Between Lem Holding and Inficon Holding
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Inficon 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 Inficon 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 Inficon Holding, you can compare the effects of market volatilities on Lem Holding and Inficon 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 Inficon Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Inficon Holding.
Diversification Opportunities for Lem Holding and Inficon Holding
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lem and Inficon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon 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 Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of Lem Holding i.e., Lem Holding and Inficon Holding go up and down completely randomly.
Pair Corralation between Lem Holding and Inficon Holding
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Inficon Holding. In addition to that, Lem Holding is 1.14 times more volatile than Inficon Holding. It trades about -0.05 of its total potential returns per unit of risk. Inficon Holding is currently generating about 0.04 per unit of volatility. If you would invest 85,673 in Inficon Holding on November 27, 2024 and sell it today you would earn a total of 29,527 from holding Inficon Holding or generate 34.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lem Holding SA vs. Inficon Holding
Performance |
| Timeline |
| Lem Holding SA |
| Inficon Holding |
Lem Holding and Inficon Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lem Holding and Inficon Holding
The main advantage of trading using opposite Lem Holding and Inficon Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Inficon 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 Inficon Holding will offset losses from the drop in Inficon 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 |
| Inficon Holding vs. VAT Group AG | Inficon Holding vs. Comet Holding AG | Inficon Holding vs. Belimo Holding | Inficon Holding vs. Bachem 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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