Correlation Between Lidds AB and Clean Motion
Can any of the company-specific risk be diversified away by investing in both Lidds AB and Clean Motion 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 Lidds AB and Clean Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lidds AB and Clean Motion AB, you can compare the effects of market volatilities on Lidds AB and Clean Motion 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 Lidds AB with a short position of Clean Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lidds AB and Clean Motion.
Diversification Opportunities for Lidds AB and Clean Motion
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lidds and Clean is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lidds AB and Clean Motion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Motion AB and Lidds AB 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 Lidds AB are associated (or correlated) with Clean Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Motion AB has no effect on the direction of Lidds AB i.e., Lidds AB and Clean Motion go up and down completely randomly.
Pair Corralation between Lidds AB and Clean Motion
Assuming the 90 days trading horizon Lidds AB is expected to generate 1.64 times more return on investment than Clean Motion. However, Lidds AB is 1.64 times more volatile than Clean Motion AB. It trades about 0.03 of its potential returns per unit of risk. Clean Motion AB is currently generating about -0.02 per unit of risk. If you would invest 22.00 in Lidds AB on August 29, 2024 and sell it today you would lose (11.00) from holding Lidds AB or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lidds AB vs. Clean Motion AB
Performance |
| Timeline |
| Lidds AB |
| Clean Motion AB |
Lidds AB and Clean Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lidds AB and Clean Motion
The main advantage of trading using opposite Lidds AB and Clean Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lidds AB position performs unexpectedly, Clean Motion 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 Clean Motion will offset losses from the drop in Clean Motion's long position.| Lidds AB vs. GomSpace Group AB | Lidds AB vs. Hansa Biopharma AB | Lidds AB vs. Zealand Pharma AS | Lidds AB vs. BioInvent International AB |
| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |