Correlation Between Lavide Holding and Flow Traders

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Can any of the company-specific risk be diversified away by investing in both Lavide Holding and Flow Traders 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 Lavide Holding and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lavide Holding NV and Flow Traders BV, you can compare the effects of market volatilities on Lavide Holding and Flow Traders 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 Lavide Holding with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavide Holding and Flow Traders.

Diversification Opportunities for Lavide Holding and Flow Traders

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Lavide and Flow is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lavide Holding NV and Flow Traders BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders BV and Lavide Holding 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 Lavide Holding NV are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders BV has no effect on the direction of Lavide Holding i.e., Lavide Holding and Flow Traders go up and down completely randomly.

Pair Corralation between Lavide Holding and Flow Traders

Assuming the 90 days trading horizon Lavide Holding NV is expected to generate 1.0 times more return on investment than Flow Traders. However, Lavide Holding NV is 1.0 times less risky than Flow Traders. It trades about 0.09 of its potential returns per unit of risk. Flow Traders BV is currently generating about -0.03 per unit of risk. If you would invest  43.00  in Lavide Holding NV on April 23, 2025 and sell it today you would earn a total of  7.00  from holding Lavide Holding NV or generate 16.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lavide Holding NV  vs.  Flow Traders BV

 Performance 
       Timeline  
Lavide Holding NV 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lavide Holding NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Lavide Holding sustained solid returns over the last few months and may actually be approaching a breakup point.
Flow Traders BV 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Flow Traders BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Lavide Holding and Flow Traders Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lavide Holding and Flow Traders

The main advantage of trading using opposite Lavide Holding and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavide Holding position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.
The idea behind Lavide Holding NV and Flow Traders BV 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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