Correlation Between Inwido AB and Lucara Diamond
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Lucara Diamond 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 Lucara Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Lucara Diamond Corp, you can compare the effects of market volatilities on Inwido AB and Lucara Diamond 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 Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Lucara Diamond.
Diversification Opportunities for Inwido AB and Lucara Diamond
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inwido and Lucara is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp 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 Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of Inwido AB i.e., Inwido AB and Lucara Diamond go up and down completely randomly.
Pair Corralation between Inwido AB and Lucara Diamond
Assuming the 90 days trading horizon Inwido AB is expected to generate 0.69 times more return on investment than Lucara Diamond. However, Inwido AB is 1.46 times less risky than Lucara Diamond. It trades about 0.36 of its potential returns per unit of risk. Lucara Diamond Corp is currently generating about -0.45 per unit of risk. If you would invest 18,330 in Inwido AB on November 5, 2024 and sell it today you would earn a total of 2,070 from holding Inwido AB or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Lucara Diamond Corp
Performance |
| Timeline |
| Inwido AB |
| Lucara Diamond Corp |
Inwido AB and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Lucara Diamond
The main advantage of trading using opposite Inwido AB and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond's long position.| Inwido AB vs. Indutrade AB | Inwido AB vs. Online Brands Nordic | Inwido AB vs. USWE Sports AB | Inwido AB vs. Catena Media plc |
| Lucara Diamond vs. Africa Oil Corp | Lucara Diamond vs. Lundin Gold | Lucara Diamond vs. Lundin Mining | Lucara Diamond vs. Inwido 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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