Correlation Between Lectra SA and Union Technologies
Can any of the company-specific risk be diversified away by investing in both Lectra SA and Union Technologies 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 Union Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lectra SA and Union Technologies Informatique, you can compare the effects of market volatilities on Lectra SA and Union Technologies 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 Union Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lectra SA and Union Technologies.
Diversification Opportunities for Lectra SA and Union Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lectra and Union is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Union Technologies Informatiqu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Technologies 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 Union Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Technologies has no effect on the direction of Lectra SA i.e., Lectra SA and Union Technologies go up and down completely randomly.
Pair Corralation between Lectra SA and Union Technologies
Assuming the 90 days trading horizon Lectra SA is expected to generate 0.46 times more return on investment than Union Technologies. However, Lectra SA is 2.18 times less risky than Union Technologies. It trades about -0.01 of its potential returns per unit of risk. Union Technologies Informatique is currently generating about -0.05 per unit of risk. If you would invest 3,065 in Lectra SA on September 12, 2024 and sell it today you would lose (295.00) from holding Lectra SA or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lectra SA vs. Union Technologies Informatiqu
Performance |
| Timeline |
| Lectra SA |
| Union Technologies |
Lectra SA and Union Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lectra SA and Union Technologies
The main advantage of trading using opposite Lectra SA and Union Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lectra SA position performs unexpectedly, Union Technologies 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 Union Technologies will offset losses from the drop in Union Technologies' long position.| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
| Union Technologies vs. Linedata Services SA | Union Technologies vs. Lectra SA | Union Technologies vs. Manitou BF SA | Union Technologies vs. Ossiam Minimum Variance |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |