Correlation Between N Leventeris and AVE SA

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

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

Diversification Opportunities for N Leventeris and AVE SA

0.11

Correlation Coefficient

N Leventeris  AVE SA

Average diversification

The 3 months correlation between LEBEP and AVE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding N Leventeris SA and AVE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVE SA and N Leventeris 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 N Leventeris SA are associated (or correlated) with AVE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVE SA has no effect on the direction of N Leventeris i.e., N Leventeris and AVE SA go up and down completely randomly.

Pair Corralation between N Leventeris and AVE SA

Assuming the 90 days trading horizon N Leventeris SA is expected to under-perform the AVE SA. In addition to that, N Leventeris is 1.43 times more volatile than AVE SA. It trades about -0.03 of its total potential returns per unit of risk. AVE SA is currently generating about 0.13 per unit of volatility. If you would invest  44.00  in AVE SA on April 25, 2025 and sell it today you would earn a total of  9.00  from holding AVE SA or generate 20.45% return on investment over 90 days.

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

N Leventeris SA  vs.  AVE SA

N Leventeris SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days N Leventeris SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, N Leventeris is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AVE SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AVE SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, AVE SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with N Leventeris and AVE SA

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

The idea behind N Leventeris SA and AVE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.