Correlation Between Linedata Services and Crosswood
Can any of the company-specific risk be diversified away by investing in both Linedata Services and Crosswood 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 Crosswood 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 Crosswood, you can compare the effects of market volatilities on Linedata Services and Crosswood 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 Crosswood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Crosswood.
Diversification Opportunities for Linedata Services and Crosswood
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Linedata and Crosswood is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and Crosswood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crosswood 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 Crosswood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crosswood has no effect on the direction of Linedata Services i.e., Linedata Services and Crosswood go up and down completely randomly.
Pair Corralation between Linedata Services and Crosswood
Assuming the 90 days trading horizon Linedata Services SA is expected to under-perform the Crosswood. In addition to that, Linedata Services is 5.17 times more volatile than Crosswood. It trades about -0.03 of its total potential returns per unit of risk. Crosswood is currently generating about 0.1 per unit of volatility. If you would invest 1,080 in Crosswood on November 27, 2024 and sell it today you would earn a total of 10.00 from holding Crosswood or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. Crosswood
Performance |
| Timeline |
| Linedata Services |
| Crosswood |
Linedata Services and Crosswood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Crosswood
The main advantage of trading using opposite Linedata Services and Crosswood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, Crosswood 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 Crosswood will offset losses from the drop in Crosswood's long position.| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
| Crosswood vs. Broadpeak SA | Crosswood vs. Entech SE SAS | Crosswood vs. Mauna Kea Technologies | Crosswood vs. Air France KLM 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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