Correlation Between Lifco AB and Vitec Software
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By analyzing existing cross correlation between Lifco AB and Vitec Software Group, you can compare the effects of market volatilities on Lifco AB and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifco AB and Vitec Software.
Diversification Opportunities for Lifco AB and Vitec Software
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifco and Vitec is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lifco AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Lifco AB i.e., Lifco AB and Vitec Software go up and down completely randomly.
Pair Corralation between Lifco AB and Vitec Software
Assuming the 90 days trading horizon Lifco AB is expected to generate 0.77 times more return on investment than Vitec Software. However, Lifco AB is 1.29 times less risky than Vitec Software. It trades about 0.09 of its potential returns per unit of risk. Vitec Software Group is currently generating about 0.02 per unit of risk. If you would invest 26,691 in Lifco AB on November 3, 2024 and sell it today you would earn a total of 9,809 from holding Lifco AB or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lifco AB vs. Vitec Software Group
Performance |
| Timeline |
| Lifco AB |
| Vitec Software Group |
Lifco AB and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifco AB and Vitec Software
The main advantage of trading using opposite Lifco AB and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifco AB position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| Lifco AB vs. Indutrade AB | Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software Group |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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