Correlation Between Lagercrantz Group and Karnov Group
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and Karnov 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 Lagercrantz Group and Karnov Group 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 Karnov Group AB, you can compare the effects of market volatilities on Lagercrantz Group and Karnov 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 Lagercrantz Group with a short position of Karnov Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and Karnov Group.
Diversification Opportunities for Lagercrantz Group and Karnov Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lagercrantz and Karnov is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Karnov Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karnov Group AB 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 Karnov Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karnov Group AB has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Karnov Group go up and down completely randomly.
Pair Corralation between Lagercrantz Group and Karnov Group
Assuming the 90 days trading horizon Lagercrantz Group AB is expected to under-perform the Karnov Group. But the stock apears to be less risky and, when comparing its historical volatility, Lagercrantz Group AB is 1.04 times less risky than Karnov Group. The stock trades about -0.24 of its potential returns per unit of risk. The Karnov Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,980 in Karnov Group AB on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Karnov Group AB or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagercrantz Group AB vs. Karnov Group AB
Performance |
| Timeline |
| Lagercrantz Group |
| Karnov Group AB |
Lagercrantz Group and Karnov Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and Karnov Group
The main advantage of trading using opposite Lagercrantz Group and Karnov Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group position performs unexpectedly, Karnov 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 Karnov Group will offset losses from the drop in Karnov Group's long position.| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
| Karnov Group vs. Attendo AB | Karnov Group vs. Ambea AB | Karnov Group vs. Inwido AB | Karnov Group vs. AcadeMedia 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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