Correlation Between Linedata Services and GEA Grenobl
Can any of the company-specific risk be diversified away by investing in both Linedata Services and GEA Grenobl 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 GEA Grenobl 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 GEA Grenobl Elect, you can compare the effects of market volatilities on Linedata Services and GEA Grenobl 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 GEA Grenobl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and GEA Grenobl.
Diversification Opportunities for Linedata Services and GEA Grenobl
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Linedata and GEA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and GEA Grenobl Elect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEA Grenobl Elect 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 GEA Grenobl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEA Grenobl Elect has no effect on the direction of Linedata Services i.e., Linedata Services and GEA Grenobl go up and down completely randomly.
Pair Corralation between Linedata Services and GEA Grenobl
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 2.2 times more return on investment than GEA Grenobl. However, Linedata Services is 2.2 times more volatile than GEA Grenobl Elect. It trades about -0.04 of its potential returns per unit of risk. GEA Grenobl Elect is currently generating about -0.75 per unit of risk. If you would invest 8,080 in Linedata Services SA on September 2, 2024 and sell it today you would lose (80.00) from holding Linedata Services SA or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. GEA Grenobl Elect
Performance |
| Timeline |
| Linedata Services |
| GEA Grenobl Elect |
Linedata Services and GEA Grenobl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and GEA Grenobl
The main advantage of trading using opposite Linedata Services and GEA Grenobl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, GEA Grenobl 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 GEA Grenobl will offset losses from the drop in GEA Grenobl's long position.| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
| GEA Grenobl vs. Graines Voltz SA | GEA Grenobl vs. Linedata Services SA | GEA Grenobl vs. Gevelot | GEA Grenobl vs. Lacroix Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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