Correlation Between Lipum AB and Mantex AB
Can any of the company-specific risk be diversified away by investing in both Lipum AB and Mantex 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 Mantex 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 Mantex AB, you can compare the effects of market volatilities on Lipum AB and Mantex 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 Mantex AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Mantex AB.
Diversification Opportunities for Lipum AB and Mantex AB
Excellent diversification
The 3 months correlation between Lipum and Mantex is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Mantex AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mantex 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 Mantex AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mantex AB has no effect on the direction of Lipum AB i.e., Lipum AB and Mantex AB go up and down completely randomly.
Pair Corralation between Lipum AB and Mantex AB
Assuming the 90 days trading horizon Lipum AB is expected to generate 0.59 times more return on investment than Mantex AB. However, Lipum AB is 1.69 times less risky than Mantex AB. It trades about 0.31 of its potential returns per unit of risk. Mantex AB is currently generating about -0.24 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. Mantex AB
Performance |
| Timeline |
| Lipum AB |
| Mantex AB |
Lipum AB and Mantex AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Mantex AB
The main advantage of trading using opposite Lipum AB and Mantex AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Mantex 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 Mantex AB will offset losses from the drop in Mantex AB's long position.The idea behind Lipum AB and Mantex AB 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.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |