Correlation Between Lime Technologies and DevPort AB
Can any of the company-specific risk be diversified away by investing in both Lime Technologies and DevPort AB 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 Lime Technologies and DevPort AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lime Technologies AB and DevPort AB, you can compare the effects of market volatilities on Lime Technologies and DevPort AB 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 Lime Technologies with a short position of DevPort AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and DevPort AB.
Diversification Opportunities for Lime Technologies and DevPort AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lime and DevPort is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and DevPort AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevPort AB and Lime Technologies 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 Lime Technologies AB are associated (or correlated) with DevPort AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevPort AB has no effect on the direction of Lime Technologies i.e., Lime Technologies and DevPort AB go up and down completely randomly.
Pair Corralation between Lime Technologies and DevPort AB
Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 1.53 times more return on investment than DevPort AB. However, Lime Technologies is 1.53 times more volatile than DevPort AB. It trades about 0.01 of its potential returns per unit of risk. DevPort AB is currently generating about -0.14 per unit of risk. If you would invest 34,521 in Lime Technologies AB on August 30, 2024 and sell it today you would lose (371.00) from holding Lime Technologies AB or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lime Technologies AB vs. DevPort AB
Performance |
| Timeline |
| Lime Technologies |
| DevPort AB |
Lime Technologies and DevPort AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lime Technologies and DevPort AB
The main advantage of trading using opposite Lime Technologies and DevPort AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lime Technologies position performs unexpectedly, DevPort AB 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 DevPort AB will offset losses from the drop in DevPort AB's long position.| Lime Technologies vs. Lifco AB | Lime Technologies vs. Lagercrantz Group AB | Lime Technologies vs. Addtech AB | Lime Technologies vs. Instalco Intressenter AB |
| DevPort AB vs. Lifco AB | DevPort AB vs. Lagercrantz Group AB | DevPort AB vs. Addtech AB | DevPort AB 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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