Correlation Between Klaria Pharma and Lidds AB
Can any of the company-specific risk be diversified away by investing in both Klaria Pharma 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 Klaria Pharma and Lidds AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klaria Pharma Holding and Lidds AB, you can compare the effects of market volatilities on Klaria Pharma 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 Klaria Pharma with a short position of Lidds AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klaria Pharma and Lidds AB.
Diversification Opportunities for Klaria Pharma and Lidds AB
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Klaria and Lidds is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Klaria Pharma Holding and Lidds AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lidds AB and Klaria Pharma 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 Klaria Pharma Holding 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 Klaria Pharma i.e., Klaria Pharma and Lidds AB go up and down completely randomly.
Pair Corralation between Klaria Pharma and Lidds AB
Assuming the 90 days trading horizon Klaria Pharma is expected to generate 1.75 times less return on investment than Lidds AB. But when comparing it to its historical volatility, Klaria Pharma Holding is 1.37 times less risky than Lidds AB. It trades about 0.04 of its potential returns per unit of risk. Lidds AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Lidds AB on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Lidds AB or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klaria Pharma Holding vs. Lidds AB
Performance |
| Timeline |
| Klaria Pharma Holding |
| Lidds AB |
Klaria Pharma and Lidds AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klaria Pharma and Lidds AB
The main advantage of trading using opposite Klaria Pharma and Lidds AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klaria Pharma 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.| Klaria Pharma vs. Stille AB | Klaria Pharma vs. Midsona AB | Klaria Pharma vs. C Rad AB | Klaria Pharma vs. Novotek 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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |