Correlation Between Lifecare and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Lifecare and Arcticzymes Technologies 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 Lifecare and Arcticzymes Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecare AS and Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Lifecare and Arcticzymes Technologies 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 Lifecare with a short position of Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecare and Arcticzymes Technologies.
Diversification Opportunities for Lifecare and Arcticzymes Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lifecare and Arcticzymes is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lifecare AS and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Lifecare 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 Lifecare AS are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Lifecare i.e., Lifecare and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Lifecare and Arcticzymes Technologies
Assuming the 90 days trading horizon Lifecare AS is expected to generate 1.27 times more return on investment than Arcticzymes Technologies. However, Lifecare is 1.27 times more volatile than Arcticzymes Technologies ASA. It trades about -0.16 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.29 per unit of risk. If you would invest 1,810 in Lifecare AS on September 2, 2024 and sell it today you would lose (360.00) from holding Lifecare AS or give up 19.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifecare AS vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Lifecare AS |
| Arcticzymes Technologies |
Lifecare and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecare and Arcticzymes Technologies
The main advantage of trading using opposite Lifecare and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecare position performs unexpectedly, Arcticzymes Technologies 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Lifecare vs. Elkem ASA | Lifecare vs. Integrated Wind Solutions | Lifecare vs. Vow ASA | Lifecare vs. North Energy ASA |
| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
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.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |