Correlation Between Lagercrantz Group and Redsense Medical
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and Redsense Medical 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 Redsense Medical 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 Redsense Medical AB, you can compare the effects of market volatilities on Lagercrantz Group and Redsense Medical 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 Redsense Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and Redsense Medical.
Diversification Opportunities for Lagercrantz Group and Redsense Medical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lagercrantz and Redsense is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Redsense Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redsense Medical 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 Redsense Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redsense Medical has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Redsense Medical go up and down completely randomly.
Pair Corralation between Lagercrantz Group and Redsense Medical
Assuming the 90 days trading horizon Lagercrantz Group is expected to generate 1.3 times less return on investment than Redsense Medical. But when comparing it to its historical volatility, Lagercrantz Group AB is 2.46 times less risky than Redsense Medical. It trades about 0.05 of its potential returns per unit of risk. Redsense Medical AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Redsense Medical AB on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Redsense Medical AB or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagercrantz Group AB vs. Redsense Medical AB
Performance |
| Timeline |
| Lagercrantz Group |
| Redsense Medical |
Lagercrantz Group and Redsense Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and Redsense Medical
The main advantage of trading using opposite Lagercrantz Group and Redsense Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group position performs unexpectedly, Redsense Medical 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 Redsense Medical will offset losses from the drop in Redsense Medical's long position.| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
| Redsense Medical vs. Mantex AB | Redsense Medical vs. Genovis AB | Redsense Medical vs. Vestum AB | Redsense Medical vs. Karolinska Development 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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