Correlation Between Lectra SA and Immersion
Can any of the company-specific risk be diversified away by investing in both Lectra SA and Immersion 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 Immersion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lectra SA and Immersion SA, you can compare the effects of market volatilities on Lectra SA and Immersion 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 Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lectra SA and Immersion.
Diversification Opportunities for Lectra SA and Immersion
Very good diversification
The 3 months correlation between Lectra and Immersion is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Immersion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion SA 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion SA has no effect on the direction of Lectra SA i.e., Lectra SA and Immersion go up and down completely randomly.
Pair Corralation between Lectra SA and Immersion
Assuming the 90 days trading horizon Lectra SA is expected to generate 0.51 times more return on investment than Immersion. However, Lectra SA is 1.95 times less risky than Immersion. It trades about 0.09 of its potential returns per unit of risk. Immersion SA is currently generating about -0.01 per unit of risk. If you would invest 2,575 in Lectra SA on August 25, 2024 and sell it today you would earn a total of 135.00 from holding Lectra SA or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lectra SA vs. Immersion SA
Performance |
| Timeline |
| Lectra SA |
| Immersion SA |
Lectra SA and Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lectra SA and Immersion
The main advantage of trading using opposite Lectra SA and Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lectra SA position performs unexpectedly, Immersion 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 Immersion will offset losses from the drop in Immersion's long position.| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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