Correlation Between VINCI SA and Lonking Holdings
Can any of the company-specific risk be diversified away by investing in both VINCI SA and Lonking Holdings 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 VINCI SA and Lonking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VINCI SA and Lonking Holdings Ltd, you can compare the effects of market volatilities on VINCI SA and Lonking Holdings 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 VINCI SA with a short position of Lonking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of VINCI SA and Lonking Holdings.
Diversification Opportunities for VINCI SA and Lonking Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VINCI and Lonking is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding VINCI SA and Lonking Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonking Holdings and VINCI 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 VINCI SA are associated (or correlated) with Lonking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonking Holdings has no effect on the direction of VINCI SA i.e., VINCI SA and Lonking Holdings go up and down completely randomly.
Pair Corralation between VINCI SA and Lonking Holdings
Assuming the 90 days horizon VINCI SA is expected to generate 0.49 times more return on investment than Lonking Holdings. However, VINCI SA is 2.05 times less risky than Lonking Holdings. It trades about -0.28 of its potential returns per unit of risk. Lonking Holdings Ltd is currently generating about -0.18 per unit of risk. If you would invest 11,065 in VINCI SA on September 5, 2024 and sell it today you would lose (962.00) from holding VINCI SA or give up 8.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VINCI SA vs. Lonking Holdings Ltd
Performance |
| Timeline |
| VINCI SA |
| Lonking Holdings |
VINCI SA and Lonking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VINCI SA and Lonking Holdings
The main advantage of trading using opposite VINCI SA and Lonking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VINCI SA position performs unexpectedly, Lonking Holdings 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 Lonking Holdings will offset losses from the drop in Lonking Holdings' long position.| VINCI SA vs. Travis Perkins PLC | VINCI SA vs. Antelope Enterprise Holdings | VINCI SA vs. Intelligent Living Application | VINCI SA vs. Beacon Roofing Supply |
| Lonking Holdings vs. Volvo AB ADR | Lonking Holdings vs. Deere Company | Lonking Holdings vs. Deutsche Post AG | Lonking Holdings vs. VINCI 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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