Correlation Between Lem Holding and Interroll Holding
Can any of the company-specific risk be diversified away by investing in both Lem Holding and Interroll 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 Interroll 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 Interroll Holding AG, you can compare the effects of market volatilities on Lem Holding and Interroll 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 Interroll Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Interroll Holding.
Diversification Opportunities for Lem Holding and Interroll Holding
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lem and Interroll is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Interroll Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interroll 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 Interroll Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interroll Holding has no effect on the direction of Lem Holding i.e., Lem Holding and Interroll Holding go up and down completely randomly.
Pair Corralation between Lem Holding and Interroll Holding
Assuming the 90 days trading horizon Lem Holding SA is expected to under-perform the Interroll Holding. In addition to that, Lem Holding is 3.21 times more volatile than Interroll Holding AG. It trades about -0.3 of its total potential returns per unit of risk. Interroll Holding AG is currently generating about -0.11 per unit of volatility. If you would invest 227,500 in Interroll Holding AG on September 1, 2024 and sell it today you would lose (10,000) from holding Interroll Holding AG or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lem Holding SA vs. Interroll Holding AG
Performance |
| Timeline |
| Lem Holding SA |
| Interroll Holding |
Lem Holding and Interroll Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lem Holding and Interroll Holding
The main advantage of trading using opposite Lem Holding and Interroll Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lem Holding position performs unexpectedly, Interroll 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 Interroll Holding will offset losses from the drop in Interroll 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 |
| Interroll Holding vs. Belimo Holding | Interroll Holding vs. Bachem Holding AG | Interroll Holding vs. VAT Group AG | Interroll Holding vs. Kardex |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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