Correlation Between L E and Abliva AB
Can any of the company-specific risk be diversified away by investing in both L E and Abliva AB 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 L E and Abliva AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L E Lundbergfretagen and Abliva AB, you can compare the effects of market volatilities on L E and Abliva AB 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 L E with a short position of Abliva AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of L E and Abliva AB.
Diversification Opportunities for L E and Abliva AB
Excellent diversification
The 3 months correlation between LUND-B and Abliva is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding L E Lundbergfretagen and Abliva AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abliva AB and L E 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 L E Lundbergfretagen are associated (or correlated) with Abliva AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abliva AB has no effect on the direction of L E i.e., L E and Abliva AB go up and down completely randomly.
Pair Corralation between L E and Abliva AB
Assuming the 90 days trading horizon L E Lundbergfretagen is expected to generate 0.66 times more return on investment than Abliva AB. However, L E Lundbergfretagen is 1.51 times less risky than Abliva AB. It trades about 0.3 of its potential returns per unit of risk. Abliva AB is currently generating about 0.18 per unit of risk. If you would invest 50,900 in L E Lundbergfretagen on November 7, 2024 and sell it today you would earn a total of 2,550 from holding L E Lundbergfretagen or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
L E Lundbergfretagen vs. Abliva AB
Performance |
| Timeline |
| L E Lundbergfretagen |
| Abliva AB |
L E and Abliva AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L E and Abliva AB
The main advantage of trading using opposite L E and Abliva AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L E position performs unexpectedly, Abliva AB 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 Abliva AB will offset losses from the drop in Abliva AB's long position.| L E vs. Investment AB Latour | L E vs. Industrivarden AB ser | L E vs. Kinnevik Investment AB | L E vs. Investor AB ser |
| Abliva AB vs. Oncopeptides AB | Abliva AB vs. Camurus AB | Abliva AB vs. Hansa Biopharma AB | Abliva AB 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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