Correlation Between Lifeclean International and Essity AB
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By analyzing existing cross correlation between Lifeclean International AB and Essity AB, you can compare the effects of market volatilities on Lifeclean International and Essity AB 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 Lifeclean International with a short position of Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeclean International and Essity AB.
Diversification Opportunities for Lifeclean International and Essity AB
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lifeclean and Essity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lifeclean International AB and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB and Lifeclean International 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 Lifeclean International AB are associated (or correlated) with Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of Lifeclean International i.e., Lifeclean International and Essity AB go up and down completely randomly.
Pair Corralation between Lifeclean International and Essity AB
Assuming the 90 days trading horizon Lifeclean International AB is expected to under-perform the Essity AB. In addition to that, Lifeclean International is 3.86 times more volatile than Essity AB. It trades about -0.03 of its total potential returns per unit of risk. Essity AB is currently generating about 0.04 per unit of volatility. If you would invest 25,264 in Essity AB on August 30, 2024 and sell it today you would earn a total of 5,296 from holding Essity AB or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeclean International AB vs. Essity AB
Performance |
| Timeline |
| Lifeclean International |
| Essity AB |
Lifeclean International and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeclean International and Essity AB
The main advantage of trading using opposite Lifeclean International and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeclean International position performs unexpectedly, Essity AB 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 Essity AB will offset losses from the drop in Essity AB's long position.| Lifeclean International vs. Mendus AB | Lifeclean International vs. JonDeTech Sensors | Lifeclean International vs. Nexam Chemical Holding | Lifeclean International vs. Lohilo Foods AB |
| Essity AB vs. Mendus AB | Essity AB vs. JonDeTech Sensors | Essity AB vs. Nexam Chemical Holding | Essity AB vs. Lohilo Foods 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 Stocks Directory module to find actively traded stocks across global markets.
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