Correlation Between Litium AB and Spectrumone Publ
Can any of the company-specific risk be diversified away by investing in both Litium AB and Spectrumone Publ 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 Litium AB and Spectrumone Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litium AB and Spectrumone publ AB, you can compare the effects of market volatilities on Litium AB and Spectrumone Publ 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 Spectrumone Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litium AB and Spectrumone Publ.
Diversification Opportunities for Litium AB and Spectrumone Publ
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Litium and Spectrumone is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Litium AB and Spectrumone publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrumone publ 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 Spectrumone Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrumone publ has no effect on the direction of Litium AB i.e., Litium AB and Spectrumone Publ go up and down completely randomly.
Pair Corralation between Litium AB and Spectrumone Publ
Assuming the 90 days trading horizon Litium AB is expected to generate 0.51 times more return on investment than Spectrumone Publ. However, Litium AB is 1.97 times less risky than Spectrumone Publ. It trades about -0.03 of its potential returns per unit of risk. Spectrumone publ AB is currently generating about -0.12 per unit of risk. If you would invest 810.00 in Litium AB on August 29, 2024 and sell it today you would lose (18.00) from holding Litium AB or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litium AB vs. Spectrumone publ AB
Performance |
| Timeline |
| Litium AB |
| Spectrumone publ |
Litium AB and Spectrumone Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litium AB and Spectrumone Publ
The main advantage of trading using opposite Litium AB and Spectrumone Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litium AB position performs unexpectedly, Spectrumone Publ 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 Spectrumone Publ will offset losses from the drop in Spectrumone Publ's long position.| Litium AB vs. Spectrumone publ AB | Litium AB vs. Media and Games | Litium AB vs. Enersize Oy | Litium AB vs. Cantargia AB |
| Spectrumone Publ vs. Kancera AB | Spectrumone Publ vs. Terranet AB | Spectrumone Publ vs. Divio Technologies AB | Spectrumone Publ 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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