Correlation Between Lifco AB and AB SKF
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By analyzing existing cross correlation between Lifco AB and AB SKF, you can compare the effects of market volatilities on Lifco AB and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifco AB and AB SKF.
Diversification Opportunities for Lifco AB and AB SKF
Good diversification
The 3 months correlation between Lifco and SKF-B is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lifco AB and AB SKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF has no effect on the direction of Lifco AB i.e., Lifco AB and AB SKF go up and down completely randomly.
Pair Corralation between Lifco AB and AB SKF
Assuming the 90 days trading horizon Lifco AB is expected to generate 0.94 times more return on investment than AB SKF. However, Lifco AB is 1.06 times less risky than AB SKF. It trades about 0.09 of its potential returns per unit of risk. AB SKF is currently generating about 0.05 per unit of risk. If you would invest 17,537 in Lifco AB on September 5, 2024 and sell it today you would earn a total of 16,223 from holding Lifco AB or generate 92.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifco AB vs. AB SKF
Performance |
| Timeline |
| Lifco AB |
| AB SKF |
Lifco AB and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifco AB and AB SKF
The main advantage of trading using opposite Lifco AB and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifco AB position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF's long position.| Lifco AB vs. Indutrade AB | Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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