Correlation Between Lifco AB and IAR Systems
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By analyzing existing cross correlation between Lifco AB and IAR Systems Group, you can compare the effects of market volatilities on Lifco AB and IAR Systems 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 IAR Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifco AB and IAR Systems.
Diversification Opportunities for Lifco AB and IAR Systems
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifco and IAR is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lifco AB and IAR Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAR Systems Group 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 IAR Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAR Systems Group has no effect on the direction of Lifco AB i.e., Lifco AB and IAR Systems go up and down completely randomly.
Pair Corralation between Lifco AB and IAR Systems
Assuming the 90 days trading horizon Lifco AB is expected to generate 0.64 times more return on investment than IAR Systems. However, Lifco AB is 1.57 times less risky than IAR Systems. It trades about 0.08 of its potential returns per unit of risk. IAR Systems Group is currently generating about 0.0 per unit of risk. If you would invest 17,720 in Lifco AB on August 28, 2024 and sell it today you would earn a total of 14,040 from holding Lifco AB or generate 79.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifco AB vs. IAR Systems Group
Performance |
| Timeline |
| Lifco AB |
| IAR Systems Group |
Lifco AB and IAR Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifco AB and IAR Systems
The main advantage of trading using opposite Lifco AB and IAR Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifco AB position performs unexpectedly, IAR Systems 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 IAR Systems will offset losses from the drop in IAR Systems' long position.| Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software Group | Lifco AB vs. Lagercrantz Group AB |
| IAR Systems vs. Lifco AB | IAR Systems vs. Lagercrantz Group AB | IAR Systems vs. Addtech AB | IAR Systems 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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