Correlation Between Footway Group and Lyko Group
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By analyzing existing cross correlation between Footway Group AB and Lyko Group A, you can compare the effects of market volatilities on Footway Group and Lyko 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 Footway Group with a short position of Lyko Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Footway Group and Lyko Group.
Diversification Opportunities for Footway Group and Lyko Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Footway and Lyko is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Footway Group AB and Lyko Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyko Group A and Footway 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 Footway Group AB are associated (or correlated) with Lyko Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyko Group A has no effect on the direction of Footway Group i.e., Footway Group and Lyko Group go up and down completely randomly.
Pair Corralation between Footway Group and Lyko Group
Assuming the 90 days trading horizon Footway Group AB is expected to under-perform the Lyko Group. But the stock apears to be less risky and, when comparing its historical volatility, Footway Group AB is 2.41 times less risky than Lyko Group. The stock trades about -0.5 of its potential returns per unit of risk. The Lyko Group A is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 9,040 in Lyko Group A on November 27, 2024 and sell it today you would earn a total of 4,180 from holding Lyko Group A or generate 46.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 19.05% |
| Values | Daily Returns |
Footway Group AB vs. Lyko Group A
Performance |
| Timeline |
| Footway Group AB |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Lyko Group A |
Footway Group and Lyko Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Footway Group and Lyko Group
The main advantage of trading using opposite Footway Group and Lyko Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Footway Group position performs unexpectedly, Lyko 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 Lyko Group will offset losses from the drop in Lyko Group's long position.| Footway Group vs. Upsales Technology AB | Footway Group vs. Train Alliance Sweden | Footway Group vs. Swedbank AB | Footway Group vs. Vitec Software Group |
| Lyko Group vs. Boozt AB | Lyko Group vs. G5 Entertainment publ | Lyko Group vs. Stillfront Group AB | Lyko Group vs. Storytel 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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