Correlation Between Lonza Group and HOYA

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

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

Diversification Opportunities for Lonza Group and HOYA

0.1

Correlation Coefficient

Lonza Group  HOYA

Average diversification

The 3 months correlation between Lonza and HOYA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lonza Group and HOYA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA and Lonza Group 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 Lonza Group are associated (or correlated) with HOYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA has no effect on the direction of Lonza Group i.e., Lonza Group and HOYA go up and down completely randomly.

Pair Corralation between Lonza Group and HOYA

Assuming the 90 days horizon Lonza Group is expected to generate 0.71 times more return on investment than HOYA. However, Lonza Group is 1.41 times less risky than HOYA. It trades about 0.01 of its potential returns per unit of risk. HOYA Corporation is currently generating about -0.02 per unit of risk. If you would invest  70,252  in Lonza Group on May 7, 2025 and sell it today you would earn a total of  248.00  from holding Lonza Group or generate 0.35% return on investment over 90 days.

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

Lonza Group  vs.  HOYA Corp.

Lonza Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lonza Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Lonza Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

HOYA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOYA Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HOYA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lonza Group and HOYA

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

The idea behind Lonza Group and HOYA Corporation 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.