Correlation Between Lectra SA and Proactis

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

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

Diversification Opportunities for Lectra SA and Proactis

0.2

Correlation Coefficient

Lectra SA  Proactis

Modest diversification

The 3 months correlation between Lectra and Proactis is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Proactis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proactis SA and Lectra SA 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 Lectra SA are associated (or correlated) with Proactis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proactis SA has no effect on the direction of Lectra SA i.e., Lectra SA and Proactis go up and down completely randomly.

Pair Corralation between Lectra SA and Proactis

Assuming the 90 days trading horizon Lectra SA is expected to under-perform the Proactis. But the stock apears to be less risky and, when comparing its historical volatility, Lectra SA is 2.01 times less risky than Proactis. The stock trades about -0.01 of its potential returns per unit of risk. The Proactis SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6.50  in Proactis SA on April 24, 2025 and sell it today you would lose (0.25) from holding Proactis SA or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Lectra SA  vs.  Proactis SA

Lectra SA

Risk-Adjusted Performance

Very Weak

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

Proactis SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proactis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Proactis is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Lectra SA and Proactis

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

The idea behind Lectra SA and Proactis 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.