Correlation Between Lexibook Linguistic and Eurofins Scientific

Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Eurofins Scientific 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 Lexibook Linguistic and Eurofins Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lexibook Linguistic Electronic and Eurofins Scientific SE, you can compare the effects of market volatilities on Lexibook Linguistic and Eurofins Scientific 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 Lexibook Linguistic with a short position of Eurofins Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Eurofins Scientific.

Diversification Opportunities for Lexibook Linguistic and Eurofins Scientific

-0.66

Correlation Coefficient

Lexibook Linguistic  Eurofins Scientific

Excellent diversification

The 3 months correlation between Lexibook and Eurofins is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Eurofins Scientific SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurofins Scientific and Lexibook Linguistic 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 Lexibook Linguistic Electronic are associated (or correlated) with Eurofins Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurofins Scientific has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Eurofins Scientific go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and Eurofins Scientific

Assuming the 90 days trading horizon Lexibook Linguistic Electronic is expected to generate 0.15 times more return on investment than Eurofins Scientific. However, Lexibook Linguistic Electronic is 6.6 times less risky than Eurofins Scientific. It trades about 0.1 of its potential returns per unit of risk. Eurofins Scientific SE is currently generating about -0.05 per unit of risk. If you would invest  391.00  in Lexibook Linguistic Electronic on September 2, 2024 and sell it today you would earn a total of  8.00  from holding Lexibook Linguistic Electronic or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Lexibook Linguistic Electronic  vs.  Eurofins Scientific SE

Lexibook Linguistic

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Lexibook Linguistic Electronic has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Lexibook Linguistic is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Eurofins Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurofins Scientific SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lexibook Linguistic and Eurofins Scientific

The main advantage of trading using opposite Lexibook Linguistic and Eurofins Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexibook Linguistic position performs unexpectedly, Eurofins Scientific 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 Eurofins Scientific will offset losses from the drop in Eurofins Scientific's long position.

The idea behind Lexibook Linguistic Electronic and Eurofins Scientific SE 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.