Correlation Between CAG Group and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both CAG Group 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 CAG Group and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAG Group AB and Lagercrantz Group AB, you can compare the effects of market volatilities on CAG Group 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 CAG Group with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and Lagercrantz Group.
Diversification Opportunities for CAG Group and Lagercrantz Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CAG and Lagercrantz is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group 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 CAG Group 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 CAG Group 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 CAG Group i.e., CAG Group and Lagercrantz Group go up and down completely randomly.
Pair Corralation between CAG Group and Lagercrantz Group
Assuming the 90 days trading horizon CAG Group AB is expected to under-perform the Lagercrantz Group. But the stock apears to be less risky and, when comparing its historical volatility, CAG Group AB is 1.61 times less risky than Lagercrantz Group. The stock trades about -0.07 of its potential returns per unit of risk. The Lagercrantz Group AB is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 19,510 in Lagercrantz Group AB on September 25, 2024 and sell it today you would earn a total of 1,710 from holding Lagercrantz Group AB or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAG Group AB vs. Lagercrantz Group AB
Performance |
| Timeline |
| CAG Group AB |
| Lagercrantz Group |
CAG Group and Lagercrantz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAG Group and Lagercrantz Group
The main advantage of trading using opposite CAG Group and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group 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.| CAG Group vs. Avensia publ AB | CAG Group vs. DevPort AB | CAG Group vs. B3 Consulting Group | CAG Group vs. Micro Systemation AB |
| Lagercrantz Group vs. FormPipe Software AB | Lagercrantz Group vs. Micro Systemation AB | Lagercrantz Group vs. CTT Systems AB | Lagercrantz Group vs. CAG Group AB |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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