Correlation Between LNA Sante and Chargeurs
Can any of the company-specific risk be diversified away by investing in both LNA Sante and Chargeurs 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 LNA Sante and Chargeurs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LNA Sante SA and Chargeurs SA, you can compare the effects of market volatilities on LNA Sante and Chargeurs 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 LNA Sante with a short position of Chargeurs. Check out your portfolio center. Please also check ongoing floating volatility patterns of LNA Sante and Chargeurs.
Diversification Opportunities for LNA Sante and Chargeurs
Very good diversification
The 3 months correlation between LNA and Chargeurs is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding LNA Sante SA and Chargeurs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chargeurs SA and LNA Sante 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 LNA Sante SA are associated (or correlated) with Chargeurs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chargeurs SA has no effect on the direction of LNA Sante i.e., LNA Sante and Chargeurs go up and down completely randomly.
Pair Corralation between LNA Sante and Chargeurs
Assuming the 90 days trading horizon LNA Sante SA is expected to generate 0.82 times more return on investment than Chargeurs. However, LNA Sante SA is 1.21 times less risky than Chargeurs. It trades about 0.0 of its potential returns per unit of risk. Chargeurs SA is currently generating about -0.01 per unit of risk. If you would invest 2,689 in LNA Sante SA on September 3, 2024 and sell it today you would lose (329.00) from holding LNA Sante SA or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LNA Sante SA vs. Chargeurs SA
Performance |
| Timeline |
| LNA Sante SA |
| Chargeurs SA |
LNA Sante and Chargeurs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LNA Sante and Chargeurs
The main advantage of trading using opposite LNA Sante and Chargeurs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LNA Sante position performs unexpectedly, Chargeurs 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 Chargeurs will offset losses from the drop in Chargeurs' long position.The idea behind LNA Sante SA and Chargeurs SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chargeurs vs. Derichebourg | Chargeurs vs. Trigano SA | Chargeurs vs. Rubis SCA | Chargeurs 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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