Correlation Between Lagercrantz Group and Vitec Software
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and Vitec 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 Vitec 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 Vitec Software Group, you can compare the effects of market volatilities on Lagercrantz Group and Vitec 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and Vitec Software.
Diversification Opportunities for Lagercrantz Group and Vitec Software
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lagercrantz and Vitec is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Vitec Software go up and down completely randomly.
Pair Corralation between Lagercrantz Group and Vitec Software
Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 1.03 times more return on investment than Vitec Software. However, Lagercrantz Group is 1.03 times more volatile than Vitec Software Group. It trades about 0.24 of its potential returns per unit of risk. Vitec Software Group is currently generating about 0.13 per unit of risk. If you would invest 21,020 in Lagercrantz Group AB on November 3, 2024 and sell it today you would earn a total of 2,580 from holding Lagercrantz Group AB or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagercrantz Group AB vs. Vitec Software Group
Performance |
| Timeline |
| Lagercrantz Group |
| Vitec Software Group |
Lagercrantz Group and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and Vitec Software
The main advantage of trading using opposite Lagercrantz Group and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group position performs unexpectedly, Vitec 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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