Correlation Between Lipum AB and Logistea A
Can any of the company-specific risk be diversified away by investing in both Lipum AB and Logistea A 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 Logistea A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipum AB and Logistea A, you can compare the effects of market volatilities on Lipum AB and Logistea A 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 Logistea A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Logistea A.
Diversification Opportunities for Lipum AB and Logistea A
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lipum and Logistea is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Logistea A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistea A 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 Logistea A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistea A has no effect on the direction of Lipum AB i.e., Lipum AB and Logistea A go up and down completely randomly.
Pair Corralation between Lipum AB and Logistea A
Assuming the 90 days trading horizon Lipum AB is expected to generate 1.52 times more return on investment than Logistea A. However, Lipum AB is 1.52 times more volatile than Logistea A. It trades about 0.31 of its potential returns per unit of risk. Logistea A is currently generating about -0.18 per unit of risk. If you would invest 1,410 in Lipum AB on August 27, 2024 and sell it today you would earn a total of 270.00 from holding Lipum AB or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. Logistea A
Performance |
| Timeline |
| Lipum AB |
| Logistea A |
Lipum AB and Logistea A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Logistea A
The main advantage of trading using opposite Lipum AB and Logistea A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Logistea A 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 Logistea A will offset losses from the drop in Logistea A's long position.The idea behind Lipum AB and Logistea A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Logistea A vs. Logistea AB Series | Logistea A vs. Corem Property Group | Logistea A vs. NP3 Fastigheter AB | Logistea A vs. NCAB Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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