Correlation Between Lohilo Foods and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Lohilo Foods and Ferronordic 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 Lohilo Foods and Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lohilo Foods AB and Ferronordic AB, you can compare the effects of market volatilities on Lohilo Foods and Ferronordic 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 Lohilo Foods with a short position of Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohilo Foods and Ferronordic.
Diversification Opportunities for Lohilo Foods and Ferronordic
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lohilo and Ferronordic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lohilo Foods AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and Lohilo Foods 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 Lohilo Foods AB are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Lohilo Foods i.e., Lohilo Foods and Ferronordic go up and down completely randomly.
Pair Corralation between Lohilo Foods and Ferronordic
Assuming the 90 days trading horizon Lohilo Foods AB is expected to generate 2.03 times more return on investment than Ferronordic. However, Lohilo Foods is 2.03 times more volatile than Ferronordic AB. It trades about 0.02 of its potential returns per unit of risk. Ferronordic AB is currently generating about 0.0 per unit of risk. If you would invest 150.00 in Lohilo Foods AB on September 13, 2024 and sell it today you would lose (7.00) from holding Lohilo Foods AB or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohilo Foods AB vs. Ferronordic AB
Performance |
| Timeline |
| Lohilo Foods AB |
| Ferronordic AB |
Lohilo Foods and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohilo Foods and Ferronordic
The main advantage of trading using opposite Lohilo Foods and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohilo Foods position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Lohilo Foods vs. Smart Eye AB | Lohilo Foods vs. Kamux Suomi Oy | Lohilo Foods vs. Zignsec AB | Lohilo Foods vs. Harvia Oyj |
| Ferronordic vs. Lohilo Foods AB | Ferronordic vs. Lime Technologies AB | Ferronordic vs. Swedbank AB | Ferronordic vs. Bio Works Technologies 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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