Correlation Between MTI Investment and Lime Technologies
Can any of the company-specific risk be diversified away by investing in both MTI Investment and Lime Technologies 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 MTI Investment and Lime Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI Investment SE and Lime Technologies AB, you can compare the effects of market volatilities on MTI Investment and Lime Technologies 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 MTI Investment with a short position of Lime Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Investment and Lime Technologies.
Diversification Opportunities for MTI Investment and Lime Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MTI and Lime is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and MTI Investment 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 MTI Investment SE are associated (or correlated) with Lime Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lime Technologies has no effect on the direction of MTI Investment i.e., MTI Investment and Lime Technologies go up and down completely randomly.
Pair Corralation between MTI Investment and Lime Technologies
Assuming the 90 days trading horizon MTI Investment SE is expected to under-perform the Lime Technologies. In addition to that, MTI Investment is 1.24 times more volatile than Lime Technologies AB. It trades about -0.07 of its total potential returns per unit of risk. Lime Technologies AB is currently generating about 0.04 per unit of volatility. If you would invest 33,700 in Lime Technologies AB on August 30, 2024 and sell it today you would earn a total of 450.00 from holding Lime Technologies AB or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Investment SE vs. Lime Technologies AB
Performance |
| Timeline |
| MTI Investment SE |
| Lime Technologies |
MTI Investment and Lime Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Investment and Lime Technologies
The main advantage of trading using opposite MTI Investment and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Investment position performs unexpectedly, Lime Technologies 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 Lime Technologies will offset losses from the drop in Lime Technologies' long position.| MTI Investment vs. Investor AB ser | MTI Investment vs. Investment AB Latour | MTI Investment vs. Tele2 AB | MTI Investment vs. Boliden AB |
| Lime Technologies vs. Lifco AB | Lime Technologies vs. Lagercrantz Group AB | Lime Technologies vs. Addtech AB | Lime Technologies vs. Instalco Intressenter 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |