Correlation Between Manitou BF and Latcore SA
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Latcore SA 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 Manitou BF and Latcore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Latcore SA, you can compare the effects of market volatilities on Manitou BF and Latcore SA 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 Manitou BF with a short position of Latcore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Latcore SA.
Diversification Opportunities for Manitou BF and Latcore SA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Manitou and Latcore is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Latcore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latcore SA and Manitou BF 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 Manitou BF SA are associated (or correlated) with Latcore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latcore SA has no effect on the direction of Manitou BF i.e., Manitou BF and Latcore SA go up and down completely randomly.
Pair Corralation between Manitou BF and Latcore SA
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Latcore SA. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 2.93 times less risky than Latcore SA. The stock trades about -0.17 of its potential returns per unit of risk. The Latcore SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1.21 in Latcore SA on September 2, 2024 and sell it today you would lose (0.41) from holding Latcore SA or give up 33.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Latcore SA
Performance |
| Timeline |
| Manitou BF SA |
| Latcore SA |
Manitou BF and Latcore SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Latcore SA
The main advantage of trading using opposite Manitou BF and Latcore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Latcore SA 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 Latcore SA will offset losses from the drop in Latcore SA's long position.| Manitou BF vs. Air Liquide SA | Manitou BF vs. Vinci SA | Manitou BF vs. LOreal SA | Manitou BF vs. Compagnie de Saint Gobain |
| Latcore SA vs. Derichebourg | Latcore SA vs. Casino Guichard Perrachon | Latcore SA vs. Etablissements Maurel et | Latcore SA vs. Manitou BF 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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