Correlation Between Linedata Services and ACTEOS SA
Can any of the company-specific risk be diversified away by investing in both Linedata Services and ACTEOS SA 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 ACTEOS SA 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 ACTEOS SA, you can compare the effects of market volatilities on Linedata Services and ACTEOS SA 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 ACTEOS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and ACTEOS SA.
Diversification Opportunities for Linedata Services and ACTEOS SA
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Linedata and ACTEOS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and ACTEOS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTEOS SA 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 ACTEOS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACTEOS SA has no effect on the direction of Linedata Services i.e., Linedata Services and ACTEOS SA go up and down completely randomly.
Pair Corralation between Linedata Services and ACTEOS SA
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 0.78 times more return on investment than ACTEOS SA. However, Linedata Services SA is 1.28 times less risky than ACTEOS SA. It trades about 0.08 of its potential returns per unit of risk. ACTEOS SA is currently generating about -0.02 per unit of risk. If you would invest 4,800 in Linedata Services SA on September 2, 2024 and sell it today you would earn a total of 3,200 from holding Linedata Services SA or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. ACTEOS SA
Performance |
| Timeline |
| Linedata Services |
| ACTEOS SA |
Linedata Services and ACTEOS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and ACTEOS SA
The main advantage of trading using opposite Linedata Services and ACTEOS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, ACTEOS SA 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 ACTEOS SA will offset losses from the drop in ACTEOS SA's long position.| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
| ACTEOS SA vs. Avenir Telecom SA | ACTEOS SA vs. ATEME SA | ACTEOS SA vs. Lectra SA | ACTEOS SA vs. BigBen Interactive |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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