Correlation Between Husqvarna and Lifco AB
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By analyzing existing cross correlation between Husqvarna AB and Lifco AB, you can compare the effects of market volatilities on Husqvarna and Lifco 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 Husqvarna with a short position of Lifco AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husqvarna and Lifco AB.
Diversification Opportunities for Husqvarna and Lifco AB
Modest diversification
The 3 months correlation between Husqvarna and Lifco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Husqvarna AB and Lifco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifco AB and Husqvarna 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 Husqvarna AB are associated (or correlated) with Lifco AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifco AB has no effect on the direction of Husqvarna i.e., Husqvarna and Lifco AB go up and down completely randomly.
Pair Corralation between Husqvarna and Lifco AB
Assuming the 90 days trading horizon Husqvarna AB is expected to under-perform the Lifco AB. In addition to that, Husqvarna is 1.19 times more volatile than Lifco AB. It trades about -0.35 of its total potential returns per unit of risk. Lifco AB is currently generating about -0.08 per unit of volatility. If you would invest 32,800 in Lifco AB on August 29, 2024 and sell it today you would lose (840.00) from holding Lifco AB or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husqvarna AB vs. Lifco AB
Performance |
| Timeline |
| Husqvarna AB |
| Lifco AB |
Husqvarna and Lifco AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husqvarna and Lifco AB
The main advantage of trading using opposite Husqvarna and Lifco AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husqvarna position performs unexpectedly, Lifco 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 Lifco AB will offset losses from the drop in Lifco AB's long position.The idea behind Husqvarna AB and Lifco 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.| Lifco AB vs. Indutrade AB | Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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