Correlation Between Lectra SA and Verimatrix

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

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

Diversification Opportunities for Lectra SA and Verimatrix

-0.15

Correlation Coefficient

Lectra SA  Verimatrix

Good diversification

The 3 months correlation between Lectra and Verimatrix is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lectra SA and Verimatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verimatrix 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 Verimatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verimatrix has no effect on the direction of Lectra SA i.e., Lectra SA and Verimatrix go up and down completely randomly.

Pair Corralation between Lectra SA and Verimatrix

Assuming the 90 days trading horizon Lectra SA is expected to under-perform the Verimatrix. But the stock apears to be less risky and, when comparing its historical volatility, Lectra SA is 1.26 times less risky than Verimatrix. The stock trades about -0.01 of its potential returns per unit of risk. The Verimatrix is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Verimatrix on April 24, 2025 and sell it today you would earn a total of  0.00  from holding Verimatrix or generate 0.0% return on investment over 90 days.

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

Lectra SA  vs.  Verimatrix

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.

Verimatrix

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Verimatrix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Verimatrix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lectra SA and Verimatrix

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

The idea behind Lectra SA and Verimatrix 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .