Correlation Between Latcore SA and Bollore SA
Can any of the company-specific risk be diversified away by investing in both Latcore SA and Bollore 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 Latcore SA and Bollore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Latcore SA and Bollore SA, you can compare the effects of market volatilities on Latcore SA and Bollore 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 Latcore SA with a short position of Bollore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latcore SA and Bollore SA.
Diversification Opportunities for Latcore SA and Bollore SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Latcore and Bollore is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Latcore SA and Bollore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bollore SA and Latcore SA 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 Latcore SA are associated (or correlated) with Bollore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bollore SA has no effect on the direction of Latcore SA i.e., Latcore SA and Bollore SA go up and down completely randomly.
Pair Corralation between Latcore SA and Bollore SA
Assuming the 90 days trading horizon Latcore SA is expected to generate 6.22 times more return on investment than Bollore SA. However, Latcore SA is 6.22 times more volatile than Bollore SA. It trades about 0.06 of its potential returns per unit of risk. Bollore SA is currently generating about 0.05 per unit of risk. If you would invest 0.72 in Latcore SA on September 7, 2024 and sell it today you would earn a total of 0.11 from holding Latcore SA or generate 15.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Latcore SA vs. Bollore SA
Performance |
Timeline |
Latcore SA |
Bollore SA |
Latcore SA and Bollore SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Latcore SA and Bollore SA
The main advantage of trading using opposite Latcore SA and Bollore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latcore SA position performs unexpectedly, Bollore 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 Bollore SA will offset losses from the drop in Bollore SA's long position.Latcore SA vs. Derichebourg | Latcore SA vs. Casino Guichard Perrachon | Latcore SA vs. Etablissements Maurel et |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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