Correlation Between Lagercrantz Group and Svenska Aerogel
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and Svenska Aerogel 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 Lagercrantz Group and Svenska Aerogel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lagercrantz Group AB and Svenska Aerogel Holding, you can compare the effects of market volatilities on Lagercrantz Group and Svenska Aerogel 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 Lagercrantz Group with a short position of Svenska Aerogel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and Svenska Aerogel.
Diversification Opportunities for Lagercrantz Group and Svenska Aerogel
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lagercrantz and Svenska is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Svenska Aerogel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Aerogel Holding and Lagercrantz 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 Lagercrantz Group AB are associated (or correlated) with Svenska Aerogel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Aerogel Holding has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Svenska Aerogel go up and down completely randomly.
Pair Corralation between Lagercrantz Group and Svenska Aerogel
Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.15 times more return on investment than Svenska Aerogel. However, Lagercrantz Group AB is 6.71 times less risky than Svenska Aerogel. It trades about 0.24 of its potential returns per unit of risk. Svenska Aerogel Holding is currently generating about -0.03 per unit of risk. If you would invest 20,400 in Lagercrantz Group AB on September 13, 2024 and sell it today you would earn a total of 1,560 from holding Lagercrantz Group AB or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagercrantz Group AB vs. Svenska Aerogel Holding
Performance |
| Timeline |
| Lagercrantz Group |
| Svenska Aerogel Holding |
Lagercrantz Group and Svenska Aerogel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and Svenska Aerogel
The main advantage of trading using opposite Lagercrantz Group and Svenska Aerogel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group position performs unexpectedly, Svenska Aerogel 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 Svenska Aerogel will offset losses from the drop in Svenska Aerogel's long position.| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
| Svenska Aerogel vs. SaltX Technology Holding | Svenska Aerogel vs. Nexam Chemical Holding | Svenska Aerogel vs. KABE Group AB | Svenska Aerogel vs. IAR Systems 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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