Correlation Between Lipum AB and Ascelia Pharma
Can any of the company-specific risk be diversified away by investing in both Lipum AB and Ascelia Pharma 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 Lipum AB and Ascelia Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipum AB and Ascelia Pharma AB, you can compare the effects of market volatilities on Lipum AB and Ascelia Pharma 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 Lipum AB with a short position of Ascelia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Ascelia Pharma.
Diversification Opportunities for Lipum AB and Ascelia Pharma
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipum and Ascelia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and Lipum AB 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 Lipum AB are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Lipum AB i.e., Lipum AB and Ascelia Pharma go up and down completely randomly.
Pair Corralation between Lipum AB and Ascelia Pharma
Assuming the 90 days trading horizon Lipum AB is expected to generate 0.69 times more return on investment than Ascelia Pharma. However, Lipum AB is 1.45 times less risky than Ascelia Pharma. It trades about 0.06 of its potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.04 per unit of risk. If you would invest 910.00 in Lipum AB on September 1, 2024 and sell it today you would earn a total of 520.00 from holding Lipum AB or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. Ascelia Pharma AB
Performance |
| Timeline |
| Lipum AB |
| Ascelia Pharma AB |
Lipum AB and Ascelia Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Ascelia Pharma
The main advantage of trading using opposite Lipum AB and Ascelia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Ascelia Pharma 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 Ascelia Pharma will offset losses from the drop in Ascelia Pharma's long position.| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
| Ascelia Pharma vs. Hansa Biopharma AB | Ascelia Pharma vs. Cantargia AB | Ascelia Pharma vs. Saniona AB | Ascelia Pharma vs. BioArctic 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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