Correlation Between Tantalus Systems and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Tantalus Systems and Legrand 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 Tantalus Systems and Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tantalus Systems Holding and Legrand SA ADR, you can compare the effects of market volatilities on Tantalus Systems and Legrand 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 Tantalus Systems with a short position of Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tantalus Systems and Legrand SA.
Diversification Opportunities for Tantalus Systems and Legrand SA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tantalus and Legrand is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tantalus Systems Holding and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR and Tantalus Systems 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 Tantalus Systems Holding are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Tantalus Systems i.e., Tantalus Systems and Legrand SA go up and down completely randomly.
Pair Corralation between Tantalus Systems and Legrand SA
Assuming the 90 days horizon Tantalus Systems Holding is expected to generate 1.2 times more return on investment than Legrand SA. However, Tantalus Systems is 1.2 times more volatile than Legrand SA ADR. It trades about 0.22 of its potential returns per unit of risk. Legrand SA ADR is currently generating about -0.32 per unit of risk. If you would invest 109.00 in Tantalus Systems Holding on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Tantalus Systems Holding or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tantalus Systems Holding vs. Legrand SA ADR
Performance |
| Timeline |
| Tantalus Systems Holding |
| Legrand SA ADR |
Tantalus Systems and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tantalus Systems and Legrand SA
The main advantage of trading using opposite Tantalus Systems and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tantalus Systems position performs unexpectedly, Legrand 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Tantalus Systems vs. FREYR Battery SA | Tantalus Systems vs. nVent Electric PLC | Tantalus Systems vs. Hubbell | Tantalus Systems vs. Advanced Energy Industries |
| Legrand SA vs. FREYR Battery SA | Legrand SA vs. nVent Electric PLC | Legrand SA vs. Hubbell | Legrand SA vs. Advanced Energy Industries |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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