Correlation Between Lexibook Linguistic and Vergnet

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

Diversification Opportunities for Lexibook Linguistic and Vergnet

-0.07

Correlation Coefficient

Lexibook Linguistic  Vergnet

Good diversification

The 3 months correlation between Lexibook and Vergnet is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lexibook Linguistic Electronic and Vergnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vergnet 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 Vergnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vergnet has no effect on the direction of Lexibook Linguistic i.e., Lexibook Linguistic and Vergnet go up and down completely randomly.

Pair Corralation between Lexibook Linguistic and Vergnet

Assuming the 90 days trading horizon Lexibook Linguistic is expected to generate 1.53 times less return on investment than Vergnet. But when comparing it to its historical volatility, Lexibook Linguistic Electronic is 5.01 times less risky than Vergnet. It trades about 0.11 of its potential returns per unit of risk. Vergnet is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.07  in Vergnet on April 24, 2025 and sell it today you would lose (0.01) from holding Vergnet or give up 14.29% of portfolio value over 90 days.

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

Lexibook Linguistic Electronic  vs.  Vergnet

Lexibook Linguistic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Lexibook Linguistic reported solid returns over the last few months and may actually be approaching a breakup point.

Vergnet

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vergnet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Vergnet reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lexibook Linguistic and Vergnet

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

The idea behind Lexibook Linguistic Electronic and Vergnet 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.