Correlation Between SUNEX SA and LSI Software
Can any of the company-specific risk be diversified away by investing in both SUNEX SA and LSI Software 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 SUNEX SA and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUNEX SA and LSI Software SA, you can compare the effects of market volatilities on SUNEX SA and LSI Software 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 SUNEX SA with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNEX SA and LSI Software.
Diversification Opportunities for SUNEX SA and LSI Software
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SUNEX and LSI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SUNEX SA and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA and SUNEX SA 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 SUNEX SA are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of SUNEX SA i.e., SUNEX SA and LSI Software go up and down completely randomly.
Pair Corralation between SUNEX SA and LSI Software
Assuming the 90 days trading horizon SUNEX SA is expected to generate 1.56 times more return on investment than LSI Software. However, SUNEX SA is 1.56 times more volatile than LSI Software SA. It trades about 0.48 of its potential returns per unit of risk. LSI Software SA is currently generating about -0.05 per unit of risk. If you would invest 594.00 in SUNEX SA on October 24, 2024 and sell it today you would earn a total of 232.00 from holding SUNEX SA or generate 39.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
SUNEX SA vs. LSI Software SA
Performance |
| Timeline |
| SUNEX SA |
| LSI Software SA |
SUNEX SA and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNEX SA and LSI Software
The main advantage of trading using opposite SUNEX SA and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNEX SA position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.| SUNEX SA vs. LSI Software SA | SUNEX SA vs. Quantum Software SA | SUNEX SA vs. ING Bank lski | SUNEX SA vs. Play2Chill SA |
| LSI Software vs. X Trade Brokers | LSI Software vs. GreenX Metals | LSI Software vs. Creativeforge Games SA | LSI Software vs. Quantum Software 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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