Correlation Between Lectra SA and Bd Multimedia
Can any of the company-specific risk be diversified away by investing in both Lectra SA and Bd Multimedia 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 Lectra SA and Bd Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lectra SA and Bd Multimedia, you can compare the effects of market volatilities on Lectra SA and Bd Multimedia 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 Lectra SA with a short position of Bd Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lectra SA and Bd Multimedia.
Diversification Opportunities for Lectra SA and Bd Multimedia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lectra and ALBDM is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Bd Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bd Multimedia and Lectra SA 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 Lectra SA are associated (or correlated) with Bd Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bd Multimedia has no effect on the direction of Lectra SA i.e., Lectra SA and Bd Multimedia go up and down completely randomly.
Pair Corralation between Lectra SA and Bd Multimedia
Assuming the 90 days trading horizon Lectra SA is expected to generate 0.38 times more return on investment than Bd Multimedia. However, Lectra SA is 2.66 times less risky than Bd Multimedia. It trades about 0.0 of its potential returns per unit of risk. Bd Multimedia is currently generating about -0.01 per unit of risk. If you would invest 2,873 in Lectra SA on August 26, 2024 and sell it today you would lose (163.00) from holding Lectra SA or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lectra SA vs. Bd Multimedia
Performance |
| Timeline |
| Lectra SA |
| Bd Multimedia |
Lectra SA and Bd Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lectra SA and Bd Multimedia
The main advantage of trading using opposite Lectra SA and Bd Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lectra SA position performs unexpectedly, Bd Multimedia 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 Bd Multimedia will offset losses from the drop in Bd Multimedia's long position.| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
| Bd Multimedia vs. Sartorius Stedim Biotech | Bd Multimedia vs. Lectra SA | Bd Multimedia vs. Teleperformance SE | Bd Multimedia vs. Trigano 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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