Correlation Between Lipum AB and Millicom International
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By analyzing existing cross correlation between Lipum AB and Millicom International Cellular, you can compare the effects of market volatilities on Lipum AB and Millicom International 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 Millicom International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipum AB and Millicom International.
Diversification Opportunities for Lipum AB and Millicom International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lipum and Millicom is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Millicom International Cellula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millicom International 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 Millicom International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millicom International has no effect on the direction of Lipum AB i.e., Lipum AB and Millicom International go up and down completely randomly.
Pair Corralation between Lipum AB and Millicom International
Assuming the 90 days trading horizon Lipum AB is expected to generate 1.99 times more return on investment than Millicom International. However, Lipum AB is 1.99 times more volatile than Millicom International Cellular. It trades about 0.28 of its potential returns per unit of risk. Millicom International Cellular is currently generating about -0.03 per unit of risk. If you would invest 1,410 in Lipum AB on August 24, 2024 and sell it today you would earn a total of 300.00 from holding Lipum AB or generate 21.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipum AB vs. Millicom International Cellula
Performance |
| Timeline |
| Lipum AB |
| Millicom International |
Lipum AB and Millicom International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipum AB and Millicom International
The main advantage of trading using opposite Lipum AB and Millicom International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipum AB position performs unexpectedly, Millicom International 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 Millicom International will offset losses from the drop in Millicom International's long position.The idea behind Lipum AB and Millicom International Cellular 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.| Millicom International vs. Tele2 AB | Millicom International vs. Telia Company AB | Millicom International vs. Kinnevik Investment AB | Millicom International vs. Intrum Justitia 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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