Correlation Between Lonza and DiaSorin SpA
Can any of the company-specific risk be diversified away by investing in both Lonza and DiaSorin SpA 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 Lonza and DiaSorin SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lonza Group and DiaSorin SpA, you can compare the effects of market volatilities on Lonza and DiaSorin SpA 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 Lonza with a short position of DiaSorin SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonza and DiaSorin SpA.
Diversification Opportunities for Lonza and DiaSorin SpA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lonza and DiaSorin is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lonza Group and DiaSorin SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaSorin SpA and Lonza 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 Lonza Group are associated (or correlated) with DiaSorin SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaSorin SpA has no effect on the direction of Lonza i.e., Lonza and DiaSorin SpA go up and down completely randomly.
Pair Corralation between Lonza and DiaSorin SpA
Assuming the 90 days horizon Lonza Group is expected to generate 1.43 times more return on investment than DiaSorin SpA. However, Lonza is 1.43 times more volatile than DiaSorin SpA. It trades about 0.03 of its potential returns per unit of risk. DiaSorin SpA is currently generating about -0.04 per unit of risk. If you would invest 48,289 in Lonza Group on September 20, 2024 and sell it today you would earn a total of 10,581 from holding Lonza Group or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.9% |
| Values | Daily Returns |
Lonza Group vs. DiaSorin SpA
Performance |
| Timeline |
| Lonza Group |
| DiaSorin SpA |
Lonza and DiaSorin SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonza and DiaSorin SpA
The main advantage of trading using opposite Lonza and DiaSorin SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonza position performs unexpectedly, DiaSorin SpA 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 DiaSorin SpA will offset losses from the drop in DiaSorin SpA's long position.| Lonza vs. China New Energy | Lonza vs. Sonic Healthcare Ltd | Lonza vs. Charles River Laboratories | Lonza vs. Qiagen NV |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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