Correlation Between Micro Systemation and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both Micro Systemation and Lagercrantz 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 Micro Systemation and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Systemation AB and Lagercrantz Group AB, you can compare the effects of market volatilities on Micro Systemation and Lagercrantz 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 Micro Systemation with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Systemation and Lagercrantz Group.
Diversification Opportunities for Micro Systemation and Lagercrantz Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micro and Lagercrantz is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Micro Systemation AB and Lagercrantz Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagercrantz Group and Micro Systemation 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 Micro Systemation AB are associated (or correlated) with Lagercrantz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagercrantz Group has no effect on the direction of Micro Systemation i.e., Micro Systemation and Lagercrantz Group go up and down completely randomly.
Pair Corralation between Micro Systemation and Lagercrantz Group
Assuming the 90 days trading horizon Micro Systemation AB is expected to generate 1.37 times more return on investment than Lagercrantz Group. However, Micro Systemation is 1.37 times more volatile than Lagercrantz Group AB. It trades about 0.0 of its potential returns per unit of risk. Lagercrantz Group AB is currently generating about -0.16 per unit of risk. If you would invest 5,051 in Micro Systemation AB on September 1, 2024 and sell it today you would lose (11.00) from holding Micro Systemation AB or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micro Systemation AB vs. Lagercrantz Group AB
Performance |
| Timeline |
| Micro Systemation |
| Lagercrantz Group |
Micro Systemation and Lagercrantz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Systemation and Lagercrantz Group
The main advantage of trading using opposite Micro Systemation and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Systemation position performs unexpectedly, Lagercrantz 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 Lagercrantz Group will offset losses from the drop in Lagercrantz Group's long position.| Micro Systemation vs. Novotek AB | Micro Systemation vs. FormPipe Software AB | Micro Systemation vs. Softronic AB | Micro Systemation vs. Prevas AB |
| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |