Correlation Between Lime Technologies and Vitec Software
Can any of the company-specific risk be diversified away by investing in both Lime Technologies and Vitec Software 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 Vitec Software 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 Vitec Software Group, you can compare the effects of market volatilities on Lime Technologies and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and Vitec Software.
Diversification Opportunities for Lime Technologies and Vitec Software
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lime and Vitec is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Lime Technologies i.e., Lime Technologies and Vitec Software go up and down completely randomly.
Pair Corralation between Lime Technologies and Vitec Software
Assuming the 90 days trading horizon Lime Technologies AB is expected to under-perform the Vitec Software. In addition to that, Lime Technologies is 1.18 times more volatile than Vitec Software Group. It trades about -0.13 of its total potential returns per unit of risk. Vitec Software Group is currently generating about 0.46 per unit of volatility. If you would invest 51,600 in Vitec Software Group on November 8, 2024 and sell it today you would earn a total of 11,150 from holding Vitec Software Group or generate 21.61% 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. Vitec Software Group
Performance |
| Timeline |
| Lime Technologies |
| Vitec Software Group |
Lime Technologies and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lime Technologies and Vitec Software
The main advantage of trading using opposite Lime Technologies and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lime Technologies position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software'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 |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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