Correlation Between Linedata Services and Lexibook Linguistic
Can any of the company-specific risk be diversified away by investing in both Linedata Services and Lexibook Linguistic 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 Linedata Services and Lexibook Linguistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and Lexibook Linguistic Electronic, you can compare the effects of market volatilities on Linedata Services and Lexibook Linguistic 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 Linedata Services with a short position of Lexibook Linguistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Lexibook Linguistic.
Diversification Opportunities for Linedata Services and Lexibook Linguistic
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Linedata and Lexibook is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic and Linedata Services 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 Linedata Services SA are associated (or correlated) with Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of Linedata Services i.e., Linedata Services and Lexibook Linguistic go up and down completely randomly.
Pair Corralation between Linedata Services and Lexibook Linguistic
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 6.88 times more return on investment than Lexibook Linguistic. However, Linedata Services is 6.88 times more volatile than Lexibook Linguistic Electronic. It trades about 0.12 of its potential returns per unit of risk. Lexibook Linguistic Electronic is currently generating about 0.15 per unit of risk. If you would invest 8,200 in Linedata Services SA on October 9, 2024 and sell it today you would earn a total of 340.00 from holding Linedata Services SA or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. Lexibook Linguistic Electronic
Performance |
| Timeline |
| Linedata Services |
| Lexibook Linguistic |
Linedata Services and Lexibook Linguistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Lexibook Linguistic
The main advantage of trading using opposite Linedata Services and Lexibook Linguistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, Lexibook Linguistic 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 Lexibook Linguistic will offset losses from the drop in Lexibook Linguistic's long position.| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
| Lexibook Linguistic vs. SA Catana Group | Lexibook Linguistic vs. Reworld Media | Lexibook Linguistic vs. Biosynex | Lexibook Linguistic vs. Moulinvest |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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