Correlation Between Lotus Bakeries and Ackermans Van
Can any of the company-specific risk be diversified away by investing in both Lotus Bakeries and Ackermans Van 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 Lotus Bakeries and Ackermans Van into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Bakeries and Ackermans Van Haaren, you can compare the effects of market volatilities on Lotus Bakeries and Ackermans Van 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 Lotus Bakeries with a short position of Ackermans Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Bakeries and Ackermans Van.
Diversification Opportunities for Lotus Bakeries and Ackermans Van
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotus and Ackermans is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Bakeries and Ackermans Van Haaren in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ackermans Van Haaren and Lotus Bakeries 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 Lotus Bakeries are associated (or correlated) with Ackermans Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ackermans Van Haaren has no effect on the direction of Lotus Bakeries i.e., Lotus Bakeries and Ackermans Van go up and down completely randomly.
Pair Corralation between Lotus Bakeries and Ackermans Van
Assuming the 90 days trading horizon Lotus Bakeries is expected to under-perform the Ackermans Van. In addition to that, Lotus Bakeries is 1.12 times more volatile than Ackermans Van Haaren. It trades about -0.08 of its total potential returns per unit of risk. Ackermans Van Haaren is currently generating about -0.05 per unit of volatility. If you would invest 19,070 in Ackermans Van Haaren on August 30, 2024 and sell it today you would lose (570.00) from holding Ackermans Van Haaren or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotus Bakeries vs. Ackermans Van Haaren
Performance |
| Timeline |
| Lotus Bakeries |
| Ackermans Van Haaren |
Lotus Bakeries and Ackermans Van Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Bakeries and Ackermans Van
The main advantage of trading using opposite Lotus Bakeries and Ackermans Van positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Bakeries position performs unexpectedly, Ackermans Van 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 Ackermans Van will offset losses from the drop in Ackermans Van's long position.| Lotus Bakeries vs. KBC Groep NV | Lotus Bakeries vs. Proximus NV | Lotus Bakeries vs. ageas SANV | Lotus Bakeries vs. Solvay SA |
| Ackermans Van vs. Sofina Socit Anonyme | Ackermans Van vs. Groep Brussel Lambert | Ackermans Van vs. Brederode SA | Ackermans Van vs. Solvay 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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