Correlation Between Lassonde Industries and ADF

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

By analyzing existing cross correlation between Lassonde Industries and ADF Group, you can compare the effects of market volatilities on Lassonde Industries and ADF 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 Lassonde Industries with a short position of ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassonde Industries and ADF.

Diversification Opportunities for Lassonde Industries and ADF

-0.39

Correlation Coefficient

Lassonde Industries  ADF

Very good diversification

The 3 months correlation between Lassonde and ADF is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lassonde Industries and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group and Lassonde Industries 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 Lassonde Industries are associated (or correlated) with ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Lassonde Industries i.e., Lassonde Industries and ADF go up and down completely randomly.

Pair Corralation between Lassonde Industries and ADF

Assuming the 90 days trading horizon Lassonde Industries is expected to generate 0.51 times more return on investment than ADF. However, Lassonde Industries is 1.97 times less risky than ADF. It trades about -0.01 of its potential returns per unit of risk. ADF Group is currently generating about -0.04 per unit of risk. If you would invest  17,680  in Lassonde Industries on September 19, 2024 and sell it today you would lose (363.00) from holding Lassonde Industries or give up 2.05% of portfolio value over 90 days.

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

Lassonde Industries  vs.  ADF Group

Lassonde Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lassonde Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lassonde Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

ADF Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADF Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Lassonde Industries and ADF

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

The idea behind Lassonde Industries and ADF Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.