Correlation Between Lime Technologies and Metacon AB
Can any of the company-specific risk be diversified away by investing in both Lime Technologies and Metacon 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 Metacon 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 Metacon AB, you can compare the effects of market volatilities on Lime Technologies and Metacon 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 Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and Metacon AB.
Diversification Opportunities for Lime Technologies and Metacon AB
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lime and Metacon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon 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 Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of Lime Technologies i.e., Lime Technologies and Metacon AB go up and down completely randomly.
Pair Corralation between Lime Technologies and Metacon AB
Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 0.32 times more return on investment than Metacon AB. However, Lime Technologies AB is 3.16 times less risky than Metacon AB. It trades about 0.04 of its potential returns per unit of risk. Metacon AB is currently generating about -0.03 per unit of risk. If you would invest 25,923 in Lime Technologies AB on October 27, 2024 and sell it today you would earn a total of 7,177 from holding Lime Technologies AB or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Lime Technologies AB vs. Metacon AB
Performance |
| Timeline |
| Lime Technologies |
| Metacon AB |
Lime Technologies and Metacon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lime Technologies and Metacon AB
The main advantage of trading using opposite Lime Technologies and Metacon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lime Technologies position performs unexpectedly, Metacon 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 Metacon AB will offset losses from the drop in Metacon AB's long position.| Lime Technologies vs. Vitec Software Group | Lime Technologies vs. MIPS AB | Lime Technologies vs. Sinch AB | Lime Technologies vs. Stillfront Group AB |
| Metacon AB vs. 24SevenOffice Scandinavia AB | Metacon AB vs. MTI Investment SE | Metacon AB vs. Spago Nanomedical AB | Metacon AB vs. FormPipe Software 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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