Correlation Between Lime Technologies and Midsummer
Can any of the company-specific risk be diversified away by investing in both Lime Technologies and Midsummer 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 Midsummer 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 Midsummer AB, you can compare the effects of market volatilities on Lime Technologies and Midsummer 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 Midsummer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and Midsummer.
Diversification Opportunities for Lime Technologies and Midsummer
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lime and Midsummer is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Midsummer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsummer 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 Midsummer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsummer AB has no effect on the direction of Lime Technologies i.e., Lime Technologies and Midsummer go up and down completely randomly.
Pair Corralation between Lime Technologies and Midsummer
Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 0.54 times more return on investment than Midsummer. However, Lime Technologies AB is 1.86 times less risky than Midsummer. It trades about 0.02 of its potential returns per unit of risk. Midsummer AB is currently generating about -0.06 per unit of risk. If you would invest 36,113 in Lime Technologies AB on September 3, 2024 and sell it today you would earn a total of 1,237 from holding Lime Technologies AB or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lime Technologies AB vs. Midsummer AB
Performance |
| Timeline |
| Lime Technologies |
| Midsummer AB |
Lime Technologies and Midsummer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lime Technologies and Midsummer
The main advantage of trading using opposite Lime Technologies and Midsummer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lime Technologies position performs unexpectedly, Midsummer 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 Midsummer will offset losses from the drop in Midsummer'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 |
| Midsummer vs. Soder Sportfiske AB | Midsummer vs. USWE Sports AB | Midsummer vs. Lime Technologies AB | Midsummer vs. SolTech Energy Sweden |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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