Correlation Between COOR Service and Lime Technologies
Can any of the company-specific risk be diversified away by investing in both COOR Service and Lime Technologies 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 COOR Service and Lime Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COOR Service Management and Lime Technologies AB, you can compare the effects of market volatilities on COOR Service and Lime Technologies 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 COOR Service with a short position of Lime Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of COOR Service and Lime Technologies.
Diversification Opportunities for COOR Service and Lime Technologies
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COOR and Lime is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding COOR Service Management and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and COOR Service 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 COOR Service Management are associated (or correlated) with Lime Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lime Technologies has no effect on the direction of COOR Service i.e., COOR Service and Lime Technologies go up and down completely randomly.
Pair Corralation between COOR Service and Lime Technologies
Assuming the 90 days trading horizon COOR Service Management is expected to under-perform the Lime Technologies. But the stock apears to be less risky and, when comparing its historical volatility, COOR Service Management is 1.27 times less risky than Lime Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Lime Technologies AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 21,074 in Lime Technologies AB on August 25, 2024 and sell it today you would earn a total of 11,826 from holding Lime Technologies AB or generate 56.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COOR Service Management vs. Lime Technologies AB
Performance |
| Timeline |
| COOR Service Management |
| Lime Technologies |
COOR Service and Lime Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COOR Service and Lime Technologies
The main advantage of trading using opposite COOR Service and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COOR Service position performs unexpectedly, Lime Technologies 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 Lime Technologies will offset losses from the drop in Lime Technologies' long position.| COOR Service vs. Inwido AB | COOR Service vs. Cloetta AB | COOR Service vs. Clas Ohlson AB | COOR Service vs. Bufab Holding AB |
| Lime Technologies vs. Lifco AB | Lime Technologies vs. Lagercrantz Group AB | Lime Technologies vs. Addtech AB | Lime Technologies vs. Instalco Intressenter 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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