Correlation Between Stellar and Lanvin Group
Can any of the company-specific risk be diversified away by investing in both Stellar and Lanvin 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 Stellar and Lanvin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Lanvin Group Holdings, you can compare the effects of market volatilities on Stellar and Lanvin 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 Stellar with a short position of Lanvin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Lanvin Group.
Diversification Opportunities for Stellar and Lanvin Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stellar and Lanvin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Lanvin Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanvin Group Holdings and Stellar 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 Stellar are associated (or correlated) with Lanvin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanvin Group Holdings has no effect on the direction of Stellar i.e., Stellar and Lanvin Group go up and down completely randomly.
Pair Corralation between Stellar and Lanvin Group
Assuming the 90 days trading horizon Stellar is expected to generate 1.49 times more return on investment than Lanvin Group. However, Stellar is 1.49 times more volatile than Lanvin Group Holdings. It trades about 0.19 of its potential returns per unit of risk. Lanvin Group Holdings is currently generating about 0.04 per unit of risk. If you would invest 9.16 in Stellar on November 2, 2024 and sell it today you would earn a total of 33.84 from holding Stellar or generate 369.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.26% |
| Values | Daily Returns |
Stellar vs. Lanvin Group Holdings
Performance |
| Timeline |
| Stellar |
| Lanvin Group Holdings |
Stellar and Lanvin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Lanvin Group
The main advantage of trading using opposite Stellar and Lanvin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Lanvin 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 Lanvin Group will offset losses from the drop in Lanvin Group's long position.The idea behind Stellar and Lanvin Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lanvin Group vs. Fossil Group | Lanvin Group vs. Signet Jewelers | Lanvin Group vs. Tapestry | Lanvin Group vs. Capri Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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