Correlation Between Main Street and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Main Street and Lonza Group 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 Main Street and Lonza Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Lonza Group, you can compare the effects of market volatilities on Main Street and Lonza Group 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 Main Street with a short position of Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Lonza Group.
Diversification Opportunities for Main Street and Lonza Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Main and Lonza is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group and Main Street 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 Main Street Capital are associated (or correlated) with Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of Main Street i.e., Main Street and Lonza Group go up and down completely randomly.
Pair Corralation between Main Street and Lonza Group
Given the investment horizon of 90 days Main Street Capital is expected to generate 0.23 times more return on investment than Lonza Group. However, Main Street Capital is 4.43 times less risky than Lonza Group. It trades about 0.89 of its potential returns per unit of risk. Lonza Group is currently generating about -0.01 per unit of risk. If you would invest 4,971 in Main Street Capital on September 3, 2024 and sell it today you would earn a total of 576.00 from holding Main Street Capital or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Capital vs. Lonza Group
Performance |
| Timeline |
| Main Street Capital |
| Lonza Group |
Main Street and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Lonza Group
The main advantage of trading using opposite Main Street and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Lonza Group vs. China New Energy | Lonza Group vs. Sonic Healthcare Ltd | Lonza Group vs. Charles River Laboratories | Lonza Group vs. Qiagen NV |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |