Correlation Between Addtech AB and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Lagercrantz Group 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 Addtech AB and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Lagercrantz Group AB, you can compare the effects of market volatilities on Addtech AB and Lagercrantz Group 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 Addtech AB with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Lagercrantz Group.
Diversification Opportunities for Addtech AB and Lagercrantz Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Addtech and Lagercrantz is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Lagercrantz Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagercrantz Group and Addtech AB 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 Addtech AB are associated (or correlated) with Lagercrantz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagercrantz Group has no effect on the direction of Addtech AB i.e., Addtech AB and Lagercrantz Group go up and down completely randomly.
Pair Corralation between Addtech AB and Lagercrantz Group
Assuming the 90 days trading horizon Addtech AB is expected to generate 2.04 times less return on investment than Lagercrantz Group. But when comparing it to its historical volatility, Addtech AB is 1.53 times less risky than Lagercrantz Group. It trades about 0.2 of its potential returns per unit of risk. Lagercrantz Group AB is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 20,860 in Lagercrantz Group AB on November 4, 2024 and sell it today you would earn a total of 2,740 from holding Lagercrantz Group AB or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Lagercrantz Group AB
Performance |
| Timeline |
| Addtech AB |
| Lagercrantz Group |
Addtech AB and Lagercrantz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Lagercrantz Group
The main advantage of trading using opposite Addtech AB and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Lagercrantz Group 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 Lagercrantz Group will offset losses from the drop in Lagercrantz Group's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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