Correlation Between L E and Ratos AB
Can any of the company-specific risk be diversified away by investing in both L E and Ratos 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 Ratos 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 Ratos AB, you can compare the effects of market volatilities on L E and Ratos 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 Ratos AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of L E and Ratos AB.
Diversification Opportunities for L E and Ratos AB
Poor diversification
The 3 months correlation between LUND-B and Ratos is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding L E Lundbergfretagen and Ratos AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratos 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 Ratos AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratos AB has no effect on the direction of L E i.e., L E and Ratos AB go up and down completely randomly.
Pair Corralation between L E and Ratos AB
Assuming the 90 days trading horizon L E Lundbergfretagen is expected to under-perform the Ratos AB. But the stock apears to be less risky and, when comparing its historical volatility, L E Lundbergfretagen is 1.92 times less risky than Ratos AB. The stock trades about -0.02 of its potential returns per unit of risk. The Ratos AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,377 in Ratos AB on September 12, 2024 and sell it today you would lose (129.00) from holding Ratos AB or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L E Lundbergfretagen vs. Ratos AB
Performance |
| Timeline |
| L E Lundbergfretagen |
| Ratos AB |
L E and Ratos AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L E and Ratos AB
The main advantage of trading using opposite L E and Ratos AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L E position performs unexpectedly, Ratos 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 Ratos AB will offset losses from the drop in Ratos 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 |
| Ratos AB vs. Catella AB | Ratos AB vs. Catella AB A | Ratos AB vs. KABE Group AB | Ratos AB vs. IAR Systems Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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