Correlation Between N Leventeris and Optronics Technologies

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

Diversification Opportunities for N Leventeris and Optronics Technologies

0.05

Correlation Coefficient

N Leventeris  Optronics Technologies

Significant diversification

The 3 months correlation between LEBEP and Optronics is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding N Leventeris SA and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies 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 Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of N Leventeris i.e., N Leventeris and Optronics Technologies go up and down completely randomly.

Pair Corralation between N Leventeris and Optronics Technologies

Assuming the 90 days trading horizon N Leventeris is expected to generate 7.61 times less return on investment than Optronics Technologies. In addition to that, N Leventeris is 1.07 times more volatile than Optronics Technologies SA. It trades about 0.02 of its total potential returns per unit of risk. Optronics Technologies SA is currently generating about 0.13 per unit of volatility. If you would invest  276.00  in Optronics Technologies SA on April 24, 2025 and sell it today you would earn a total of  24.00  from holding Optronics Technologies SA or generate 8.7% 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.  Optronics Technologies SA

N Leventeris SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in N Leventeris SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Optronics Technologies

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Optronics Technologies SA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Optronics Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with N Leventeris and Optronics Technologies

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

The idea behind N Leventeris SA and Optronics Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.