Correlation Between Cyxone AB and Lidds AB
Can any of the company-specific risk be diversified away by investing in both Cyxone AB and Lidds 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 Cyxone AB and Lidds AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyxone AB and Lidds AB, you can compare the effects of market volatilities on Cyxone AB and Lidds 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 Cyxone AB with a short position of Lidds AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyxone AB and Lidds AB.
Diversification Opportunities for Cyxone AB and Lidds AB
Very good diversification
The 3 months correlation between Cyxone and Lidds is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cyxone AB and Lidds AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lidds AB and Cyxone 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 Cyxone AB are associated (or correlated) with Lidds AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lidds AB has no effect on the direction of Cyxone AB i.e., Cyxone AB and Lidds AB go up and down completely randomly.
Pair Corralation between Cyxone AB and Lidds AB
Assuming the 90 days trading horizon Cyxone AB is expected to generate 2.27 times less return on investment than Lidds AB. In addition to that, Cyxone AB is 1.49 times more volatile than Lidds AB. It trades about 0.01 of its total potential returns per unit of risk. Lidds AB is currently generating about 0.05 per unit of volatility. If you would invest 12.00 in Lidds AB on August 29, 2024 and sell it today you would lose (1.00) from holding Lidds AB or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyxone AB vs. Lidds AB
Performance |
| Timeline |
| Cyxone AB |
| Lidds AB |
Cyxone AB and Lidds AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyxone AB and Lidds AB
The main advantage of trading using opposite Cyxone AB and Lidds AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyxone AB position performs unexpectedly, Lidds 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 Lidds AB will offset losses from the drop in Lidds AB's long position.The idea behind Cyxone AB and Lidds AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lidds AB vs. GomSpace Group AB | Lidds AB vs. Hansa Biopharma AB | Lidds AB vs. Zealand Pharma AS | Lidds AB vs. BioInvent International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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