Correlation Between Lipum AB and Terranet
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By analyzing existing cross correlation between Lipum AB and Terranet AB, you can compare the effects of market volatilities on Lipum AB and Terranet 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 Terranet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Terranet.
Diversification Opportunities for Lipum AB and Terranet
Excellent diversification
The 3 months correlation between Lipum and Terranet is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Terranet AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terranet 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 Terranet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terranet AB has no effect on the direction of Lipum AB i.e., Lipum AB and Terranet go up and down completely randomly.
Pair Corralation between Lipum AB and Terranet
Assuming the 90 days trading horizon Lipum AB is expected to generate 0.43 times more return on investment than Terranet. However, Lipum AB is 2.31 times less risky than Terranet. It trades about 0.23 of its potential returns per unit of risk. Terranet AB is currently generating about 0.08 per unit of risk. If you would invest 670.00 in Lipum AB on August 28, 2024 and sell it today you would earn a total of 1,010 from holding Lipum AB or generate 150.75% 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. Terranet AB
Performance |
| Timeline |
| Lipum AB |
| Terranet AB |
Lipum AB and Terranet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Terranet
The main advantage of trading using opposite Lipum AB and Terranet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Terranet 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 Terranet will offset losses from the drop in Terranet's long position.The idea behind Lipum AB and Terranet 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.| Terranet vs. Lifco AB | Terranet vs. Lagercrantz Group AB | Terranet vs. Addtech AB | Terranet 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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