Correlation Between Litium AB and Divio Technologies
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By analyzing existing cross correlation between Litium AB and Divio Technologies AB, you can compare the effects of market volatilities on Litium AB and Divio Technologies 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 Litium AB with a short position of Divio Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litium AB and Divio Technologies.
Diversification Opportunities for Litium AB and Divio Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Litium and Divio is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Litium AB and Divio Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Divio Technologies and Litium 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 Litium AB are associated (or correlated) with Divio Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Divio Technologies has no effect on the direction of Litium AB i.e., Litium AB and Divio Technologies go up and down completely randomly.
Pair Corralation between Litium AB and Divio Technologies
Assuming the 90 days trading horizon Litium AB is expected to generate 0.77 times more return on investment than Divio Technologies. However, Litium AB is 1.3 times less risky than Divio Technologies. It trades about 0.22 of its potential returns per unit of risk. Divio Technologies AB is currently generating about 0.08 per unit of risk. If you would invest 788.00 in Litium AB on November 4, 2024 and sell it today you would earn a total of 132.00 from holding Litium AB or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litium AB vs. Divio Technologies AB
Performance |
| Timeline |
| Litium AB |
| Divio Technologies |
Litium AB and Divio Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litium AB and Divio Technologies
The main advantage of trading using opposite Litium AB and Divio Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litium AB position performs unexpectedly, Divio Technologies 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 Divio Technologies will offset losses from the drop in Divio Technologies' long position.| Litium AB vs. Avensia publ AB | Litium AB vs. Micro Systemation AB | Litium AB vs. Generic Sweden publ | Litium AB vs. FormPipe Software AB |
| Divio Technologies vs. Spectrumone publ AB | Divio Technologies vs. Media and Games | Divio Technologies vs. Enersize Oy | Divio Technologies vs. Cantargia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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