Correlation Between LeapFrog Enterprises and Roche Holding
Can any of the company-specific risk be diversified away by investing in both LeapFrog Enterprises and Roche Holding 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 LeapFrog Enterprises and Roche Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LeapFrog Enterprises and Roche Holding AG, you can compare the effects of market volatilities on LeapFrog Enterprises and Roche Holding 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 LeapFrog Enterprises with a short position of Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of LeapFrog Enterprises and Roche Holding.
Diversification Opportunities for LeapFrog Enterprises and Roche Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LeapFrog and Roche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LeapFrog Enterprises and Roche Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding AG and LeapFrog Enterprises 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 LeapFrog Enterprises are associated (or correlated) with Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding AG has no effect on the direction of LeapFrog Enterprises i.e., LeapFrog Enterprises and Roche Holding go up and down completely randomly.
Pair Corralation between LeapFrog Enterprises and Roche Holding
If you would invest (100.00) in LeapFrog Enterprises on January 26, 2024 and sell it today you would earn a total of 100.00 from holding LeapFrog Enterprises or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LeapFrog Enterprises vs. Roche Holding AG
Performance |
| Timeline |
| LeapFrog Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Roche Holding AG |
LeapFrog Enterprises and Roche Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LeapFrog Enterprises and Roche Holding
The main advantage of trading using opposite LeapFrog Enterprises and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LeapFrog Enterprises position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding's long position.| LeapFrog Enterprises vs. Yips Chemical Holdings | LeapFrog Enterprises vs. Qorvo Inc | LeapFrog Enterprises vs. Microchip Technology | LeapFrog Enterprises vs. NL Industries |
| Roche Holding vs. Grifols SA ADR | Roche Holding vs. Pfizer Inc | Roche Holding vs. Sanofi ADR | Roche Holding vs. Organon Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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