Correlation Between Pierce Group and Lyko Group
Can any of the company-specific risk be diversified away by investing in both Pierce Group and Lyko 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 Pierce Group and Lyko Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pierce Group AB and Lyko Group A, you can compare the effects of market volatilities on Pierce Group and Lyko 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 Pierce Group with a short position of Lyko Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pierce Group and Lyko Group.
Diversification Opportunities for Pierce Group and Lyko Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pierce and Lyko is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pierce Group AB and Lyko Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyko Group A and Pierce 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 Pierce Group AB are associated (or correlated) with Lyko Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyko Group A has no effect on the direction of Pierce Group i.e., Pierce Group and Lyko Group go up and down completely randomly.
Pair Corralation between Pierce Group and Lyko Group
Assuming the 90 days trading horizon Pierce Group AB is expected to generate 1.07 times more return on investment than Lyko Group. However, Pierce Group is 1.07 times more volatile than Lyko Group A. It trades about 0.05 of its potential returns per unit of risk. Lyko Group A is currently generating about -0.01 per unit of risk. If you would invest 620.00 in Pierce Group AB on August 25, 2024 and sell it today you would earn a total of 208.00 from holding Pierce Group AB or generate 33.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pierce Group AB vs. Lyko Group A
Performance |
| Timeline |
| Pierce Group AB |
| Lyko Group A |
Pierce Group and Lyko Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pierce Group and Lyko Group
The main advantage of trading using opposite Pierce Group and Lyko Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pierce Group position performs unexpectedly, Lyko 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 Lyko Group will offset losses from the drop in Lyko Group's long position.| Pierce Group vs. Rugvista Group AB | Pierce Group vs. Karnov Group AB | Pierce Group vs. Nordic Waterproofing Holding | Pierce Group vs. BHG Group AB |
| Lyko Group vs. Boozt AB | Lyko Group vs. G5 Entertainment publ | Lyko Group vs. Stillfront Group AB | Lyko Group vs. Storytel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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