Correlation Between Lyko Group and Desenio Group
Can any of the company-specific risk be diversified away by investing in both Lyko Group and Desenio Group 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 Lyko Group and Desenio Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyko Group A and Desenio Group AB, you can compare the effects of market volatilities on Lyko Group and Desenio Group 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 Lyko Group with a short position of Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyko Group and Desenio Group.
Diversification Opportunities for Lyko Group and Desenio Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lyko and Desenio is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lyko Group A and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio Group AB and Lyko Group 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 Lyko Group A are associated (or correlated) with Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of Lyko Group i.e., Lyko Group and Desenio Group go up and down completely randomly.
Pair Corralation between Lyko Group and Desenio Group
Assuming the 90 days trading horizon Lyko Group A is expected to under-perform the Desenio Group. But the stock apears to be less risky and, when comparing its historical volatility, Lyko Group A is 4.95 times less risky than Desenio Group. The stock trades about -0.27 of its potential returns per unit of risk. The Desenio Group AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Desenio Group AB on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Desenio Group AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyko Group A vs. Desenio Group AB
Performance |
| Timeline |
| Lyko Group A |
| Desenio Group AB |
Lyko Group and Desenio Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyko Group and Desenio Group
The main advantage of trading using opposite Lyko Group and Desenio Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyko Group position performs unexpectedly, Desenio Group 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 Desenio Group will offset losses from the drop in Desenio Group's long position.| Lyko Group vs. Mendus AB | Lyko Group vs. JonDeTech Sensors | Lyko Group vs. Nexam Chemical Holding | Lyko Group vs. Lohilo Foods AB |
| Desenio Group vs. Rugvista Group AB | Desenio Group vs. Cint Group AB | Desenio Group vs. BHG Group AB | Desenio Group vs. Lyko Group A |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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