Correlation Between Lupatech and Adobe
Can any of the company-specific risk be diversified away by investing in both Lupatech and Adobe 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 Lupatech and Adobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Adobe Inc, you can compare the effects of market volatilities on Lupatech and Adobe 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 Lupatech with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Adobe.
Diversification Opportunities for Lupatech and Adobe
Modest diversification
The 3 months correlation between Lupatech and Adobe is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and Lupatech 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 Lupatech SA are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of Lupatech i.e., Lupatech and Adobe go up and down completely randomly.
Pair Corralation between Lupatech and Adobe
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Adobe. In addition to that, Lupatech is 1.24 times more volatile than Adobe Inc. It trades about -0.01 of its total potential returns per unit of risk. Adobe Inc is currently generating about 0.07 per unit of volatility. If you would invest 4,994 in Adobe Inc on September 3, 2024 and sell it today you would earn a total of 1,216 from holding Adobe Inc or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. Adobe Inc
Performance |
| Timeline |
| Lupatech SA |
| Adobe Inc |
Lupatech and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Adobe
The main advantage of trading using opposite Lupatech and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit SA |
| Adobe vs. Autohome | Adobe vs. Charter Communications | Adobe vs. Lupatech SA | Adobe vs. Extra Space Storage |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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