Correlation Between Lectra SA and Kerlink SAS
Can any of the company-specific risk be diversified away by investing in both Lectra SA and Kerlink SAS 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 Kerlink SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lectra SA and Kerlink SAS, you can compare the effects of market volatilities on Lectra SA and Kerlink SAS 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 Kerlink SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lectra SA and Kerlink SAS.
Diversification Opportunities for Lectra SA and Kerlink SAS
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lectra and Kerlink is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Kerlink SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerlink SAS 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 Kerlink SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerlink SAS has no effect on the direction of Lectra SA i.e., Lectra SA and Kerlink SAS go up and down completely randomly.
Pair Corralation between Lectra SA and Kerlink SAS
Assuming the 90 days trading horizon Lectra SA is expected to generate 1.41 times less return on investment than Kerlink SAS. But when comparing it to its historical volatility, Lectra SA is 2.91 times less risky than Kerlink SAS. It trades about 0.25 of its potential returns per unit of risk. Kerlink SAS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Kerlink SAS on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Kerlink SAS or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lectra SA vs. Kerlink SAS
Performance |
| Timeline |
| Lectra SA |
| Kerlink SAS |
Lectra SA and Kerlink SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lectra SA and Kerlink SAS
The main advantage of trading using opposite Lectra SA and Kerlink SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lectra SA position performs unexpectedly, Kerlink SAS 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 Kerlink SAS will offset losses from the drop in Kerlink SAS's long position.| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
| Kerlink SAS vs. Claranova SE | Kerlink SAS vs. Balyo SA | Kerlink SAS vs. DBT SA | Kerlink SAS vs. Wallix Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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