Correlation Between Lipum AB and Svenska Aerogel
Can any of the company-specific risk be diversified away by investing in both Lipum AB and Svenska Aerogel 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 Svenska Aerogel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipum AB and Svenska Aerogel Holding, you can compare the effects of market volatilities on Lipum AB and Svenska Aerogel 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 Svenska Aerogel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Svenska Aerogel.
Diversification Opportunities for Lipum AB and Svenska Aerogel
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lipum and Svenska is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Svenska Aerogel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Aerogel Holding 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 Svenska Aerogel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Aerogel Holding has no effect on the direction of Lipum AB i.e., Lipum AB and Svenska Aerogel go up and down completely randomly.
Pair Corralation between Lipum AB and Svenska Aerogel
Assuming the 90 days trading horizon Lipum AB is expected to generate 1.1 times more return on investment than Svenska Aerogel. However, Lipum AB is 1.1 times more volatile than Svenska Aerogel Holding. It trades about 0.35 of its potential returns per unit of risk. Svenska Aerogel Holding is currently generating about -0.24 per unit of risk. If you would invest 1,190 in Lipum AB on October 23, 2024 and sell it today you would earn a total of 200.00 from holding Lipum AB or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. Svenska Aerogel Holding
Performance |
| Timeline |
| Lipum AB |
| Svenska Aerogel Holding |
Lipum AB and Svenska Aerogel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Svenska Aerogel
The main advantage of trading using opposite Lipum AB and Svenska Aerogel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Svenska Aerogel 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 Svenska Aerogel will offset losses from the drop in Svenska Aerogel'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 |
| Svenska Aerogel vs. SaltX Technology Holding | Svenska Aerogel vs. Nexam Chemical Holding | Svenska Aerogel vs. AAC Clyde Space | Svenska Aerogel vs. Triboron International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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