Correlation Between Inwido AB and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Lagercrantz Group 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 Inwido AB and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Lagercrantz Group AB, you can compare the effects of market volatilities on Inwido AB and Lagercrantz 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 Inwido AB with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Lagercrantz Group.
Diversification Opportunities for Inwido AB and Lagercrantz Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inwido and Lagercrantz is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Lagercrantz Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagercrantz Group and Inwido 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 Inwido AB are associated (or correlated) with Lagercrantz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagercrantz Group has no effect on the direction of Inwido AB i.e., Inwido AB and Lagercrantz Group go up and down completely randomly.
Pair Corralation between Inwido AB and Lagercrantz Group
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.98 times less return on investment than Lagercrantz Group. But when comparing it to its historical volatility, Inwido AB is 1.28 times less risky than Lagercrantz Group. It trades about 0.09 of its potential returns per unit of risk. Lagercrantz Group AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 20,640 in Lagercrantz Group AB on November 6, 2024 and sell it today you would earn a total of 2,960 from holding Lagercrantz Group AB or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Lagercrantz Group AB
Performance |
| Timeline |
| Inwido AB |
| Lagercrantz Group |
Inwido AB and Lagercrantz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Lagercrantz Group
The main advantage of trading using opposite Inwido AB and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Lagercrantz 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 Lagercrantz Group will offset losses from the drop in Lagercrantz Group's long position.| Inwido AB vs. FormPipe Software AB | Inwido AB vs. MTI Investment SE | Inwido AB vs. High Coast Distillery | Inwido AB vs. Sdiptech AB |
| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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