Correlation Between Lidds AB and ScandiDos
Can any of the company-specific risk be diversified away by investing in both Lidds AB and ScandiDos 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 ScandiDos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lidds AB and ScandiDos AB, you can compare the effects of market volatilities on Lidds AB and ScandiDos 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 ScandiDos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lidds AB and ScandiDos.
Diversification Opportunities for Lidds AB and ScandiDos
Very good diversification
The 3 months correlation between Lidds and ScandiDos is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lidds AB and ScandiDos AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScandiDos 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 ScandiDos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScandiDos AB has no effect on the direction of Lidds AB i.e., Lidds AB and ScandiDos go up and down completely randomly.
Pair Corralation between Lidds AB and ScandiDos
Assuming the 90 days trading horizon Lidds AB is expected to under-perform the ScandiDos. In addition to that, Lidds AB is 10.02 times more volatile than ScandiDos AB. It trades about -0.04 of its total potential returns per unit of risk. ScandiDos AB is currently generating about 0.14 per unit of volatility. If you would invest 165.00 in ScandiDos AB on September 2, 2024 and sell it today you would earn a total of 7.00 from holding ScandiDos AB or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lidds AB vs. ScandiDos AB
Performance |
| Timeline |
| Lidds AB |
| ScandiDos AB |
Lidds AB and ScandiDos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lidds AB and ScandiDos
The main advantage of trading using opposite Lidds AB and ScandiDos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lidds AB position performs unexpectedly, ScandiDos 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 ScandiDos will offset losses from the drop in ScandiDos' long position.| Lidds AB vs. Mendus AB | Lidds AB vs. Cantargia AB | Lidds AB vs. BioInvent International AB | Lidds AB vs. Isofol Medical AB |
| ScandiDos vs. Scibase AB | ScandiDos vs. Arcoma AB | ScandiDos vs. Lidds AB | ScandiDos vs. Clinical Laserthermia Systems |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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