Correlation Between Lipum AB and DevPort AB
Can any of the company-specific risk be diversified away by investing in both Lipum AB and DevPort 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 Lipum AB and DevPort AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipum AB and DevPort AB, you can compare the effects of market volatilities on Lipum AB and DevPort 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 Lipum AB with a short position of DevPort AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and DevPort AB.
Diversification Opportunities for Lipum AB and DevPort AB
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lipum and DevPort is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and DevPort AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevPort 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 DevPort AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevPort AB has no effect on the direction of Lipum AB i.e., Lipum AB and DevPort AB go up and down completely randomly.
Pair Corralation between Lipum AB and DevPort AB
Assuming the 90 days trading horizon Lipum AB is expected to generate 1.57 times more return on investment than DevPort AB. However, Lipum AB is 1.57 times more volatile than DevPort AB. It trades about 0.16 of its potential returns per unit of risk. DevPort AB is currently generating about -0.16 per unit of risk. If you would invest 1,480 in Lipum AB on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Lipum AB or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. DevPort AB
Performance |
| Timeline |
| Lipum AB |
| DevPort AB |
Lipum AB and DevPort AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and DevPort AB
The main advantage of trading using opposite Lipum AB and DevPort AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, DevPort 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 DevPort AB will offset losses from the drop in DevPort AB'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 |
| DevPort AB vs. Lifco AB | DevPort AB vs. Lagercrantz Group AB | DevPort AB vs. Addtech AB | DevPort AB 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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