Correlation Between L E and I Tech
Can any of the company-specific risk be diversified away by investing in both L E and I Tech 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 I Tech 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 I Tech, you can compare the effects of market volatilities on L E and I Tech 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 I Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of L E and I Tech.
Diversification Opportunities for L E and I Tech
Pay attention - limited upside
The 3 months correlation between LUND-B and ITECH is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding L E Lundbergfretagen and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech 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 I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of L E i.e., L E and I Tech go up and down completely randomly.
Pair Corralation between L E and I Tech
Assuming the 90 days trading horizon L E Lundbergfretagen is expected to under-perform the I Tech. But the stock apears to be less risky and, when comparing its historical volatility, L E Lundbergfretagen is 2.34 times less risky than I Tech. The stock trades about -0.05 of its potential returns per unit of risk. The I Tech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,820 in I Tech on October 26, 2024 and sell it today you would earn a total of 880.00 from holding I Tech or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
L E Lundbergfretagen vs. I Tech
Performance |
| Timeline |
| L E Lundbergfretagen |
| I Tech |
L E and I Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L E and I Tech
The main advantage of trading using opposite L E and I Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L E position performs unexpectedly, I Tech 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 I Tech will offset losses from the drop in I Tech'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 |
| I Tech vs. Genovis AB | I Tech vs. Bonesupport Holding AB | I Tech vs. Enea AB | I Tech vs. Xvivo Perfusion 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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