Correlation Between Lyko Group and Rugvista Group
Can any of the company-specific risk be diversified away by investing in both Lyko Group and Rugvista 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 Rugvista 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 Rugvista Group AB, you can compare the effects of market volatilities on Lyko Group and Rugvista 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 Rugvista Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyko Group and Rugvista Group.
Diversification Opportunities for Lyko Group and Rugvista Group
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyko and Rugvista is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lyko Group A and Rugvista Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugvista 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 Rugvista Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugvista Group AB has no effect on the direction of Lyko Group i.e., Lyko Group and Rugvista Group go up and down completely randomly.
Pair Corralation between Lyko Group and Rugvista Group
Assuming the 90 days trading horizon Lyko Group A is expected to generate 2.12 times more return on investment than Rugvista Group. However, Lyko Group is 2.12 times more volatile than Rugvista Group AB. It trades about 0.39 of its potential returns per unit of risk. Rugvista Group AB is currently generating about 0.16 per unit of risk. If you would invest 9,040 in Lyko Group A on November 27, 2024 and sell it today you would earn a total of 4,180 from holding Lyko Group A or generate 46.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyko Group A vs. Rugvista Group AB
Performance |
| Timeline |
| Lyko Group A |
| Rugvista Group AB |
Lyko Group and Rugvista Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyko Group and Rugvista Group
The main advantage of trading using opposite Lyko Group and Rugvista Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyko Group position performs unexpectedly, Rugvista 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 Rugvista Group will offset losses from the drop in Rugvista Group's long position.| Lyko Group vs. Boozt AB | Lyko Group vs. G5 Entertainment publ | Lyko Group vs. Stillfront Group AB | Lyko Group vs. Storytel AB |
| Rugvista Group vs. Cint Group AB | Rugvista Group vs. Desenio Group AB | Rugvista Group vs. Fractal Gaming Group | Rugvista Group vs. Pierce Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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