Correlation Between Lifco AB and HMS Networks
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By analyzing existing cross correlation between Lifco AB and HMS Networks AB, you can compare the effects of market volatilities on Lifco AB and HMS Networks 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 Lifco AB with a short position of HMS Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifco AB and HMS Networks.
Diversification Opportunities for Lifco AB and HMS Networks
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifco and HMS is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lifco AB and HMS Networks AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Networks AB and Lifco 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 Lifco AB are associated (or correlated) with HMS Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Networks AB has no effect on the direction of Lifco AB i.e., Lifco AB and HMS Networks go up and down completely randomly.
Pair Corralation between Lifco AB and HMS Networks
Assuming the 90 days trading horizon Lifco AB is expected to generate 0.77 times more return on investment than HMS Networks. However, Lifco AB is 1.29 times less risky than HMS Networks. It trades about -0.04 of its potential returns per unit of risk. HMS Networks AB is currently generating about -0.1 per unit of risk. If you would invest 32,600 in Lifco AB on August 30, 2024 and sell it today you would lose (500.00) from holding Lifco AB or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lifco AB vs. HMS Networks AB
Performance |
| Timeline |
| Lifco AB |
| HMS Networks AB |
Lifco AB and HMS Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifco AB and HMS Networks
The main advantage of trading using opposite Lifco AB and HMS Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifco AB position performs unexpectedly, HMS Networks 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 HMS Networks will offset losses from the drop in HMS Networks' long position.| Lifco AB vs. Indutrade AB | Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software Group |
| HMS Networks vs. Vitec Software Group | HMS Networks vs. Troax Group AB | HMS Networks vs. Sectra AB | HMS Networks vs. Addnode 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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