Correlation Between Sanofi ADR and Lennar
Can any of the company-specific risk be diversified away by investing in both Sanofi ADR and Lennar 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 Sanofi ADR and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi ADR and Lennar, you can compare the effects of market volatilities on Sanofi ADR and Lennar 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 Sanofi ADR with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi ADR and Lennar.
Diversification Opportunities for Sanofi ADR and Lennar
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanofi and Lennar is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi ADR and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Sanofi ADR 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 Sanofi ADR are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Sanofi ADR i.e., Sanofi ADR and Lennar go up and down completely randomly.
Pair Corralation between Sanofi ADR and Lennar
Considering the 90-day investment horizon Sanofi ADR is expected to under-perform the Lennar. But the stock apears to be less risky and, when comparing its historical volatility, Sanofi ADR is 1.69 times less risky than Lennar. The stock trades about -0.14 of its potential returns per unit of risk. The Lennar is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,109 in Lennar on January 17, 2024 and sell it today you would earn a total of 36.00 from holding Lennar or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sanofi ADR vs. Lennar
Performance |
| Timeline |
| Sanofi ADR |
| Lennar |
Sanofi ADR and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi ADR and Lennar
The main advantage of trading using opposite Sanofi ADR and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| Sanofi ADR vs. PetIQ Inc | Sanofi ADR vs. Emergent Biosolutions | Sanofi ADR vs. Neurocrine Biosciences | Sanofi ADR vs. Haleon plc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |