Correlation Between Lagercrantz Group and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and FormPipe Software 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 FormPipe Software 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 FormPipe Software AB, you can compare the effects of market volatilities on Lagercrantz Group and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and FormPipe Software.
Diversification Opportunities for Lagercrantz Group and FormPipe Software
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lagercrantz and FormPipe is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and FormPipe Software go up and down completely randomly.
Pair Corralation between Lagercrantz Group and FormPipe Software
Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.59 times more return on investment than FormPipe Software. However, Lagercrantz Group AB is 1.69 times less risky than FormPipe Software. It trades about 0.29 of its potential returns per unit of risk. FormPipe Software AB is currently generating about -0.09 per unit of risk. If you would invest 19,510 in Lagercrantz Group AB on September 24, 2024 and sell it today you would earn a total of 1,710 from holding Lagercrantz Group AB or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lagercrantz Group AB vs. FormPipe Software AB
Performance |
| Timeline |
| Lagercrantz Group |
| FormPipe Software |
Lagercrantz Group and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and FormPipe Software
The main advantage of trading using opposite Lagercrantz Group and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| Lagercrantz Group vs. FormPipe Software AB | Lagercrantz Group vs. Micro Systemation AB | Lagercrantz Group vs. CTT Systems AB | Lagercrantz Group vs. CAG Group AB |
| FormPipe Software vs. Lagercrantz Group AB | FormPipe Software vs. Vitec Software Group | FormPipe Software vs. Addnode Group AB | FormPipe Software 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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