Correlation Between Lohilo Foods and Investment
Can any of the company-specific risk be diversified away by investing in both Lohilo Foods and Investment 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 Investment 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 Investment AB Oresund, you can compare the effects of market volatilities on Lohilo Foods and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohilo Foods and Investment.
Diversification Opportunities for Lohilo Foods and Investment
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lohilo and Investment is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lohilo Foods AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Lohilo Foods i.e., Lohilo Foods and Investment go up and down completely randomly.
Pair Corralation between Lohilo Foods and Investment
Assuming the 90 days trading horizon Lohilo Foods AB is expected to generate 3.07 times more return on investment than Investment. However, Lohilo Foods is 3.07 times more volatile than Investment AB Oresund. It trades about 0.03 of its potential returns per unit of risk. Investment AB Oresund is currently generating about 0.06 per unit of risk. If you would invest 133.00 in Lohilo Foods AB on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Lohilo Foods AB or generate 8.27% 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. Investment AB Oresund
Performance |
| Timeline |
| Lohilo Foods AB |
| Investment AB Oresund |
Lohilo Foods and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohilo Foods and Investment
The main advantage of trading using opposite Lohilo Foods and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohilo Foods position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment'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 |
| Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser | Investment vs. Investment AB Latour |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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