Correlation Between LSI Software and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both LSI Software and Bank Millennium 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 LSI Software and Bank Millennium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Software SA and Bank Millennium SA, you can compare the effects of market volatilities on LSI Software and Bank Millennium 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 LSI Software with a short position of Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Software and Bank Millennium.
Diversification Opportunities for LSI Software and Bank Millennium
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LSI and Bank is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium SA and LSI Software 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 LSI Software SA are associated (or correlated) with Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of LSI Software i.e., LSI Software and Bank Millennium go up and down completely randomly.
Pair Corralation between LSI Software and Bank Millennium
Assuming the 90 days trading horizon LSI Software SA is expected to under-perform the Bank Millennium. In addition to that, LSI Software is 1.67 times more volatile than Bank Millennium SA. It trades about -0.15 of its total potential returns per unit of risk. Bank Millennium SA is currently generating about 0.44 per unit of volatility. If you would invest 868.00 in Bank Millennium SA on October 22, 2024 and sell it today you would earn a total of 94.00 from holding Bank Millennium SA or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LSI Software SA vs. Bank Millennium SA
Performance |
| Timeline |
| LSI Software SA |
| Bank Millennium SA |
LSI Software and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Software and Bank Millennium
The main advantage of trading using opposite LSI Software and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Software position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.| LSI Software vs. Immobile | LSI Software vs. Noble Financials SA | LSI Software vs. PMPG Polskie Media | LSI Software vs. Carlson Investments SA |
| Bank Millennium vs. MW Trade SA | Bank Millennium vs. Quantum Software SA | Bank Millennium vs. PLAYWAY SA | Bank Millennium vs. Skyline Investment 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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