Correlation Between Lipum AB and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Lipum AB and FormPipe 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 Lipum AB and FormPipe Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipum AB and FormPipe Software AB, you can compare the effects of market volatilities on Lipum AB and FormPipe 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 Lipum AB with a short position of FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and FormPipe Software.
Diversification Opportunities for Lipum AB and FormPipe Software
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lipum and FormPipe is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Lipum AB i.e., Lipum AB and FormPipe Software go up and down completely randomly.
Pair Corralation between Lipum AB and FormPipe Software
Assuming the 90 days trading horizon Lipum AB is expected to generate 1.58 times more return on investment than FormPipe Software. However, Lipum AB is 1.58 times more volatile than FormPipe Software AB. It trades about 0.27 of its potential returns per unit of risk. FormPipe Software AB is currently generating about -0.09 per unit of risk. If you would invest 1,410 in Lipum AB on August 29, 2024 and sell it today you would earn a total of 250.00 from holding Lipum AB or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. FormPipe Software AB
Performance |
| Timeline |
| Lipum AB |
| FormPipe Software |
Lipum AB and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and FormPipe Software
The main advantage of trading using opposite Lipum AB and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, FormPipe 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 FormPipe Software will offset losses from the drop in FormPipe Software'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 |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |