Correlation Between Lime Technologies and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both Lime Technologies and Invisio Communications 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 Invisio Communications 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 Invisio Communications AB, you can compare the effects of market volatilities on Lime Technologies and Invisio Communications 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 Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and Invisio Communications.
Diversification Opportunities for Lime Technologies and Invisio Communications
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lime and Invisio is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications 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 Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of Lime Technologies i.e., Lime Technologies and Invisio Communications go up and down completely randomly.
Pair Corralation between Lime Technologies and Invisio Communications
Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 1.2 times more return on investment than Invisio Communications. However, Lime Technologies is 1.2 times more volatile than Invisio Communications AB. It trades about 0.06 of its potential returns per unit of risk. Invisio Communications AB is currently generating about 0.01 per unit of risk. If you would invest 33,450 in Lime Technologies AB on August 29, 2024 and sell it today you would earn a total of 950.00 from holding Lime Technologies AB or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lime Technologies AB vs. Invisio Communications AB
Performance |
| Timeline |
| Lime Technologies |
| Invisio Communications |
Lime Technologies and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lime Technologies and Invisio Communications
The main advantage of trading using opposite Lime Technologies and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lime Technologies position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' long position.| Lime Technologies vs. Lifco AB | Lime Technologies vs. Lagercrantz Group AB | Lime Technologies vs. Addtech AB | Lime Technologies vs. Instalco Intressenter AB |
| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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