Correlation Between Quadient and Lectra SA

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

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

Diversification Opportunities for Quadient and Lectra SA

-0.08

Correlation Coefficient

Quadient  Lectra SA

Good diversification

The 3 months correlation between Quadient and Lectra is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Quadient SA and Lectra SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lectra SA and Quadient 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 Quadient SA are associated (or correlated) with Lectra SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lectra SA has no effect on the direction of Quadient i.e., Quadient and Lectra SA go up and down completely randomly.

Pair Corralation between Quadient and Lectra SA

Assuming the 90 days trading horizon Quadient is expected to generate 1.58 times less return on investment than Lectra SA. But when comparing it to its historical volatility, Quadient SA is 1.4 times less risky than Lectra SA. It trades about 0.03 of its potential returns per unit of risk. Lectra SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,441  in Lectra SA on April 21, 2025 and sell it today you would earn a total of  69.00  from holding Lectra SA or generate 2.83% return on investment over 90 days.

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

Quadient SA  vs.  Lectra SA

Quadient SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quadient SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Quadient is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lectra SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lectra SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Quadient and Lectra SA

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

The idea behind Quadient SA and Lectra 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.