Correlation Between Lonza Group and Logitech International
Can any of the company-specific risk be diversified away by investing in both Lonza Group and Logitech International 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 Lonza Group and Logitech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lonza Group AG and Logitech International SA, you can compare the effects of market volatilities on Lonza Group and Logitech International 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 Lonza Group with a short position of Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonza Group and Logitech International.
Diversification Opportunities for Lonza Group and Logitech International
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lonza and Logitech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lonza Group AG and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International and Lonza Group 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 Lonza Group AG are associated (or correlated) with Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of Lonza Group i.e., Lonza Group and Logitech International go up and down completely randomly.
Pair Corralation between Lonza Group and Logitech International
Assuming the 90 days trading horizon Lonza Group AG is expected to generate 1.11 times more return on investment than Logitech International. However, Lonza Group is 1.11 times more volatile than Logitech International SA. It trades about 0.1 of its potential returns per unit of risk. Logitech International SA is currently generating about -0.02 per unit of risk. If you would invest 35,101 in Lonza Group AG on August 25, 2024 and sell it today you would earn a total of 17,039 from holding Lonza Group AG or generate 48.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lonza Group AG vs. Logitech International SA
Performance |
| Timeline |
| Lonza Group AG |
| Logitech International |
Lonza Group and Logitech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonza Group and Logitech International
The main advantage of trading using opposite Lonza Group and Logitech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonza Group position performs unexpectedly, Logitech International 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 Logitech International will offset losses from the drop in Logitech International's long position.| Lonza Group vs. Sika AG | Lonza Group vs. Givaudan SA | Lonza Group vs. Geberit AG | Lonza Group vs. Swiss Life Holding |
| Logitech International vs. Geberit AG | Logitech International vs. Sika AG | Logitech International vs. Lonza Group AG | Logitech International vs. Swiss Life Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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