Correlation Between Beijer Ref and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both Beijer Ref 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 Beijer Ref and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijer Ref AB and Lagercrantz Group AB, you can compare the effects of market volatilities on Beijer Ref 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 Beijer Ref with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and Lagercrantz Group.
Diversification Opportunities for Beijer Ref and Lagercrantz Group
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijer and Lagercrantz is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref 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 Beijer Ref 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 Beijer Ref 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 Beijer Ref i.e., Beijer Ref and Lagercrantz Group go up and down completely randomly.
Pair Corralation between Beijer Ref and Lagercrantz Group
Assuming the 90 days trading horizon Beijer Ref is expected to generate 3.12 times less return on investment than Lagercrantz Group. In addition to that, Beijer Ref is 1.28 times more volatile than Lagercrantz Group AB. It trades about 0.02 of its total potential returns per unit of risk. Lagercrantz Group AB is currently generating about 0.08 per unit of volatility. If you would invest 10,355 in Lagercrantz Group AB on August 28, 2024 and sell it today you would earn a total of 9,155 from holding Lagercrantz Group AB or generate 88.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijer Ref AB vs. Lagercrantz Group AB
Performance |
| Timeline |
| Beijer Ref AB |
| Lagercrantz Group |
Beijer Ref and Lagercrantz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and Lagercrantz Group
The main advantage of trading using opposite Beijer Ref and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref 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.| Beijer Ref vs. Lagercrantz Group AB | Beijer Ref vs. Addtech AB | Beijer Ref vs. AddLife AB | Beijer Ref vs. Bufab Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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