Correlation Between Lohilo Foods and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Lohilo Foods and FormPipe Software 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 FormPipe Software 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 FormPipe Software AB, you can compare the effects of market volatilities on Lohilo Foods and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohilo Foods and FormPipe Software.
Diversification Opportunities for Lohilo Foods and FormPipe Software
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lohilo and FormPipe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lohilo Foods AB and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Lohilo Foods i.e., Lohilo Foods and FormPipe Software go up and down completely randomly.
Pair Corralation between Lohilo Foods and FormPipe Software
Assuming the 90 days trading horizon Lohilo Foods AB is expected to generate 2.23 times more return on investment than FormPipe Software. However, Lohilo Foods is 2.23 times more volatile than FormPipe Software AB. It trades about 0.03 of its potential returns per unit of risk. FormPipe Software AB is currently generating about 0.0 per unit of risk. If you would invest 133.00 in Lohilo Foods AB on September 14, 2024 and sell it today you would earn a total of 9.00 from holding Lohilo Foods AB or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohilo Foods AB vs. FormPipe Software AB
Performance |
| Timeline |
| Lohilo Foods AB |
| FormPipe Software |
Lohilo Foods and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohilo Foods and FormPipe Software
The main advantage of trading using opposite Lohilo Foods and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohilo Foods position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software'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 |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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