Correlation Between Lanvin Group and Lennar

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

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

Diversification Opportunities for Lanvin Group and Lennar

-0.38

Correlation Coefficient

Lanvin Group  Lennar

Very good diversification

The 3 months correlation between Lanvin and Lennar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lanvin Group Holdings and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Lanvin 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 Lanvin Group Holdings are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Lanvin Group i.e., Lanvin Group and Lennar go up and down completely randomly.

Pair Corralation between Lanvin Group and Lennar

Given the investment horizon of 90 days Lanvin Group Holdings is expected to under-perform the Lennar. In addition to that, Lanvin Group is 2.54 times more volatile than Lennar. It trades about -0.09 of its total potential returns per unit of risk. Lennar is currently generating about -0.03 per unit of volatility. If you would invest  16,365  in Lennar on February 7, 2024 and sell it today you would lose (555.00) from holding Lennar or give up 3.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Lanvin Group Holdings  vs.  Lennar

Lanvin Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lanvin Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Lennar

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lennar are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Lennar is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lanvin Group and Lennar

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

The idea behind Lanvin Group Holdings and Lennar 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.