Correlation Between FLOW TRADERS and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and Lenovo 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 FLOW TRADERS and Lenovo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Lenovo Group Limited, you can compare the effects of market volatilities on FLOW TRADERS and Lenovo 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 FLOW TRADERS with a short position of Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Lenovo Group.
Diversification Opportunities for FLOW TRADERS and Lenovo Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FLOW and Lenovo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and Lenovo Group go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Lenovo Group
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.85 times more return on investment than Lenovo Group. However, FLOW TRADERS LTD is 1.17 times less risky than Lenovo Group. It trades about 0.2 of its potential returns per unit of risk. Lenovo Group Limited is currently generating about -0.01 per unit of risk. If you would invest 2,080 in FLOW TRADERS LTD on November 3, 2024 and sell it today you would earn a total of 304.00 from holding FLOW TRADERS LTD or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Lenovo Group Limited
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Lenovo Group Limited |
FLOW TRADERS and Lenovo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Lenovo Group
The main advantage of trading using opposite FLOW TRADERS and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, Lenovo 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 Lenovo Group will offset losses from the drop in Lenovo Group's long position.| FLOW TRADERS vs. Tencent Music Entertainment | FLOW TRADERS vs. LPKF Laser Electronics | FLOW TRADERS vs. Nanjing Panda Electronics | FLOW TRADERS vs. UMC Electronics Co |
| Lenovo Group vs. GREENX METALS LTD | Lenovo Group vs. Osisko Metals | Lenovo Group vs. SIERRA METALS | Lenovo Group vs. East Africa Metals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |