Correlation Between Alcatel Lucent and Qualcomm Incorporated
Can any of the company-specific risk be diversified away by investing in both Alcatel Lucent and Qualcomm Incorporated 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 Alcatel Lucent and Qualcomm Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alcatel Lucent and Qualcomm Incorporated, you can compare the effects of market volatilities on Alcatel Lucent and Qualcomm Incorporated 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 Alcatel Lucent with a short position of Qualcomm Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcatel Lucent and Qualcomm Incorporated.
Diversification Opportunities for Alcatel Lucent and Qualcomm Incorporated
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alcatel and Qualcomm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alcatel Lucent and Qualcomm Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualcomm Incorporated and Alcatel Lucent 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 Alcatel Lucent are associated (or correlated) with Qualcomm Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualcomm Incorporated has no effect on the direction of Alcatel Lucent i.e., Alcatel Lucent and Qualcomm Incorporated go up and down completely randomly.
Pair Corralation between Alcatel Lucent and Qualcomm Incorporated
If you would invest (100.00) in Alcatel Lucent on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Alcatel Lucent 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 |
Alcatel Lucent vs. Qualcomm Incorporated
Performance |
| Timeline |
| Alcatel Lucent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Qualcomm Incorporated |
Alcatel Lucent and Qualcomm Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcatel Lucent and Qualcomm Incorporated
The main advantage of trading using opposite Alcatel Lucent and Qualcomm Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcatel Lucent position performs unexpectedly, Qualcomm Incorporated 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 Qualcomm Incorporated will offset losses from the drop in Qualcomm Incorporated's long position.| Alcatel Lucent vs. Guangdong Investment Limited | Alcatel Lucent vs. Western Asset Investment | Alcatel Lucent vs. Aegon NV ADR | Alcatel Lucent vs. Eastman Chemical |
| Qualcomm Incorporated vs. Marvell Technology Group | Qualcomm Incorporated vs. Micron Technology | Qualcomm Incorporated vs. Advanced Micro Devices | Qualcomm Incorporated vs. Intel |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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