Correlation Between Lexibook Linguistic and Maat Pharma

Can any of the company-specific risk be diversified away by investing in both Lexibook Linguistic and Maat Pharma 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 Maat Pharma 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 Maat Pharma SA, you can compare the effects of market volatilities on Lexibook Linguistic and Maat Pharma 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 Maat Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexibook Linguistic and Maat Pharma.

Diversification Opportunities for Lexibook Linguistic and Maat Pharma

0.53

Correlation Coefficient

Lexibook Linguistic  Maat Pharma

Very weak diversification

The 3 months correlation between Lexibook and Maat is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Maat Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maat Pharma SA 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 Maat Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maat Pharma SA has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Maat Pharma go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and Maat Pharma

Assuming the 90 days trading horizon Lexibook Linguistic is expected to generate 4.61 times less return on investment than Maat Pharma. But when comparing it to its historical volatility, Lexibook Linguistic Electronic is 5.7 times less risky than Maat Pharma. It trades about 0.1 of its potential returns per unit of risk. Maat Pharma SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Maat Pharma SA on September 3, 2024 and sell it today you would earn a total of  64.00  from holding Maat Pharma SA or generate 8.77% return on investment over 90 days.

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

Lexibook Linguistic Electronic  vs.  Maat Pharma SA

Lexibook Linguistic

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. 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.

Maat Pharma SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lexibook Linguistic and Maat Pharma

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

The idea behind Lexibook Linguistic Electronic and Maat Pharma SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.