Correlation Between Worldline and Lectra SA
Can any of the company-specific risk be diversified away by investing in both Worldline and Lectra 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 Worldline and Lectra SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldline SA and Lectra SA, you can compare the effects of market volatilities on Worldline and Lectra 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 Worldline with a short position of Lectra SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldline and Lectra SA.
Diversification Opportunities for Worldline and Lectra SA
Average diversification
The 3 months correlation between Worldline and Lectra is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Worldline SA and Lectra SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lectra SA and Worldline 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 Worldline SA are associated (or correlated) with Lectra SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lectra SA has no effect on the direction of Worldline i.e., Worldline and Lectra SA go up and down completely randomly.
Pair Corralation between Worldline and Lectra SA
Assuming the 90 days trading horizon Worldline SA is expected to under-perform the Lectra SA. In addition to that, Worldline is 1.88 times more volatile than Lectra SA. It trades about -0.07 of its total potential returns per unit of risk. Lectra SA is currently generating about -0.02 per unit of volatility. If you would invest 3,729 in Lectra SA on August 31, 2024 and sell it today you would lose (929.00) from holding Lectra SA or give up 24.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldline SA vs. Lectra SA
Performance |
| Timeline |
| Worldline SA |
| Lectra SA |
Worldline and Lectra SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldline and Lectra SA
The main advantage of trading using opposite Worldline and Lectra SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldline position performs unexpectedly, Lectra 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 Lectra SA will offset losses from the drop in Lectra SA's long position.| Worldline vs. Chargeurs SA | Worldline vs. Straumann Holding AG | Worldline vs. Manitou BF SA | Worldline vs. Amundi Index Solutions |
| Lectra SA vs. Linedata Services SA | Lectra SA vs. Interparfums SA | Lectra SA vs. Esker SA | Lectra SA vs. Neurones |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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