Correlation Between CPI Computer and Lavipharm

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

By analyzing existing cross correlation between CPI Computer Peripherals and Lavipharm SA, you can compare the effects of market volatilities on CPI Computer and Lavipharm 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 CPI Computer with a short position of Lavipharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Computer and Lavipharm.

Diversification Opportunities for CPI Computer and Lavipharm

0.63

Correlation Coefficient

CPI Computer  Lavipharm

Poor diversification

The 3 months correlation between CPI and Lavipharm is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Lavipharm SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavipharm SA and CPI Computer 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 CPI Computer Peripherals are associated (or correlated) with Lavipharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavipharm SA has no effect on the direction of CPI Computer i.e., CPI Computer and Lavipharm go up and down completely randomly.

Pair Corralation between CPI Computer and Lavipharm

Assuming the 90 days trading horizon CPI Computer Peripherals is expected to generate 2.15 times more return on investment than Lavipharm. However, CPI Computer is 2.15 times more volatile than Lavipharm SA. It trades about 0.09 of its potential returns per unit of risk. Lavipharm SA is currently generating about 0.12 per unit of risk. If you would invest  52.00  in CPI Computer Peripherals on April 24, 2025 and sell it today you would earn a total of  9.00  from holding CPI Computer Peripherals or generate 17.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

CPI Computer Peripherals  vs.  Lavipharm SA

CPI Computer Peripherals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CPI Computer Peripherals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, CPI Computer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lavipharm SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lavipharm SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Lavipharm may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CPI Computer and Lavipharm

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

The idea behind CPI Computer Peripherals and Lavipharm SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..