Correlation Between Linedata Services and SQLI SA
Can any of the company-specific risk be diversified away by investing in both Linedata Services and SQLI 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 SQLI 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 SQLI SA, you can compare the effects of market volatilities on Linedata Services and SQLI 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 SQLI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and SQLI SA.
Diversification Opportunities for Linedata Services and SQLI SA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linedata and SQLI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and SQLI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQLI 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 SQLI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQLI SA has no effect on the direction of Linedata Services i.e., Linedata Services and SQLI SA go up and down completely randomly.
Pair Corralation between Linedata Services and SQLI SA
Assuming the 90 days trading horizon Linedata Services SA is expected to under-perform the SQLI SA. In addition to that, Linedata Services is 2.59 times more volatile than SQLI SA. It trades about -0.01 of its total potential returns per unit of risk. SQLI SA is currently generating about 0.12 per unit of volatility. If you would invest 5,350 in SQLI SA on August 29, 2024 and sell it today you would earn a total of 50.00 from holding SQLI SA or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. SQLI SA
Performance |
| Timeline |
| Linedata Services |
| SQLI SA |
Linedata Services and SQLI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and SQLI SA
The main advantage of trading using opposite Linedata Services and SQLI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services position performs unexpectedly, SQLI 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 SQLI SA will offset losses from the drop in SQLI 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 |
| SQLI SA vs. Neurones | SQLI SA vs. Manitou BF SA | SQLI SA vs. Ossiam Minimum Variance | SQLI SA vs. Granite 3x LVMH |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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