Correlation Between ABIVAX Société and Lsv Small

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

By analyzing existing cross correlation between ABIVAX Socit Anonyme and Lsv Small Cap, you can compare the effects of market volatilities on ABIVAX Société and Lsv Small 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 ABIVAX Société with a short position of Lsv Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABIVAX Société and Lsv Small.

Diversification Opportunities for ABIVAX Société and Lsv Small

-0.13

Correlation Coefficient

ABIVAX Société  Lsv Small

Good diversification

The 3 months correlation between ABIVAX and Lsv is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ABIVAX Socit Anonyme and Lsv Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Small Cap and ABIVAX Société 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 ABIVAX Socit Anonyme are associated (or correlated) with Lsv Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Small Cap has no effect on the direction of ABIVAX Société i.e., ABIVAX Société and Lsv Small go up and down completely randomly.

Pair Corralation between ABIVAX Société and Lsv Small

Assuming the 90 days horizon ABIVAX Socit Anonyme is expected to under-perform the Lsv Small. In addition to that, ABIVAX Société is 2.45 times more volatile than Lsv Small Cap. It trades about -0.13 of its total potential returns per unit of risk. Lsv Small Cap is currently generating about 0.08 per unit of volatility. If you would invest  1,776  in Lsv Small Cap on July 7, 2024 and sell it today you would earn a total of  126.00  from holding Lsv Small Cap or generate 7.09% return on investment over 90 days.

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

ABIVAX Socit Anonyme  vs.  Lsv Small Cap

ABIVAX Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABIVAX Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Lsv Small Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lsv Small may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with ABIVAX Société and Lsv Small

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

The idea behind ABIVAX Socit Anonyme and Lsv Small Cap 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.