Correlation Between CirChem AB and Lipum AB
Can any of the company-specific risk be diversified away by investing in both CirChem AB 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 CirChem AB and Lipum AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CirChem AB and Lipum AB, you can compare the effects of market volatilities on CirChem AB 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 CirChem AB with a short position of Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CirChem AB and Lipum AB.
Diversification Opportunities for CirChem AB and Lipum AB
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CirChem and Lipum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CirChem AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB and CirChem 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 CirChem 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 CirChem AB i.e., CirChem AB and Lipum AB go up and down completely randomly.
Pair Corralation between CirChem AB and Lipum AB
Assuming the 90 days trading horizon CirChem AB is expected to generate 2.07 times less return on investment than Lipum AB. In addition to that, CirChem AB is 1.05 times more volatile than Lipum AB. It trades about 0.01 of its total potential returns per unit of risk. Lipum AB is currently generating about 0.02 per unit of volatility. If you would invest 1,400 in Lipum AB on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Lipum AB or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CirChem AB vs. Lipum AB
Performance |
| Timeline |
| CirChem AB |
| Lipum AB |
CirChem AB and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CirChem AB and Lipum AB
The main advantage of trading using opposite CirChem AB and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CirChem AB 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.| CirChem AB vs. Intervacc AB | CirChem AB vs. Alzinova AB | CirChem AB vs. Clinical Laserthermia Systems | CirChem AB vs. AAC Clyde Space |
| Lipum AB vs. Simris Alg AB | Lipum AB vs. Immunovia publ AB | Lipum AB vs. Sedana Medical AB | Lipum AB vs. KABE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |