Correlation Between Lemonade and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both Lemonade and Vonovia SE 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 Lemonade and Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lemonade and Vonovia SE ADR, you can compare the effects of market volatilities on Lemonade and Vonovia SE 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 Lemonade with a short position of Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemonade and Vonovia SE.
Diversification Opportunities for Lemonade and Vonovia SE
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lemonade and Vonovia is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lemonade and Vonovia SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE ADR and Lemonade 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 Lemonade are associated (or correlated) with Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE ADR has no effect on the direction of Lemonade i.e., Lemonade and Vonovia SE go up and down completely randomly.
Pair Corralation between Lemonade and Vonovia SE
Given the investment horizon of 90 days Lemonade is expected to generate 5.59 times more return on investment than Vonovia SE. However, Lemonade is 5.59 times more volatile than Vonovia SE ADR. It trades about 0.56 of its potential returns per unit of risk. Vonovia SE ADR is currently generating about -0.14 per unit of risk. If you would invest 1,864 in Lemonade on August 28, 2024 and sell it today you would earn a total of 3,238 from holding Lemonade or generate 173.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lemonade vs. Vonovia SE ADR
Performance |
| Timeline |
| Lemonade |
| Vonovia SE ADR |
Lemonade and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemonade and Vonovia SE
The main advantage of trading using opposite Lemonade and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemonade position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| Lemonade vs. Fiverr International | Lemonade vs. Pinterest | Lemonade vs. Upstart Holdings | Lemonade vs. Fastly Inc |
| Vonovia SE vs. Vonovia SE | Vonovia SE vs. HeidelbergCement AG ADR | Vonovia SE vs. Muenchener Rueckver Ges | Vonovia SE vs. Sun Hung Kai |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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