Correlation Between EEducation Albert and Lipum AB
Can any of the company-specific risk be diversified away by investing in both EEducation Albert and Lipum AB 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 EEducation Albert and Lipum AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eEducation Albert AB and Lipum AB, you can compare the effects of market volatilities on EEducation Albert and Lipum AB 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 EEducation Albert with a short position of Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEducation Albert and Lipum AB.
Diversification Opportunities for EEducation Albert and Lipum AB
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EEducation and Lipum is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and Lipum AB go up and down completely randomly.
Pair Corralation between EEducation Albert and Lipum AB
Assuming the 90 days trading horizon EEducation Albert is expected to generate 2.04 times less return on investment than Lipum AB. In addition to that, EEducation Albert is 1.09 times more volatile than Lipum AB. It trades about 0.15 of its total potential returns per unit of risk. Lipum AB is currently generating about 0.34 per unit of volatility. If you would invest 1,200 in Lipum AB on October 30, 2024 and sell it today you would earn a total of 240.00 from holding Lipum AB or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eEducation Albert AB vs. Lipum AB
Performance |
| Timeline |
| eEducation Albert |
| Lipum AB |
EEducation Albert and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EEducation Albert and Lipum AB
The main advantage of trading using opposite EEducation Albert and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EEducation Albert position performs unexpectedly, Lipum AB 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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