Correlation Between Ranplan and Lime Technologies

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Can any of the company-specific risk be diversified away by investing in both Ranplan 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 Ranplan and Lime Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ranplan Group and Lime Technologies AB, you can compare the effects of market volatilities on Ranplan 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 Ranplan with a short position of Lime Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranplan and Lime Technologies.

Diversification Opportunities for Ranplan and Lime Technologies

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Ranplan and Lime is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ranplan Group and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and Ranplan 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 Ranplan Group 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 Ranplan i.e., Ranplan and Lime Technologies go up and down completely randomly.

Pair Corralation between Ranplan and Lime Technologies

Assuming the 90 days trading horizon Ranplan Group is expected to generate 2.84 times more return on investment than Lime Technologies. However, Ranplan is 2.84 times more volatile than Lime Technologies AB. It trades about 0.03 of its potential returns per unit of risk. Lime Technologies AB is currently generating about 0.05 per unit of risk. If you would invest  196.00  in Ranplan Group on September 13, 2024 and sell it today you would lose (51.00) from holding Ranplan Group or give up 26.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ranplan Group  vs.  Lime Technologies AB

 Performance 
       Timeline  
Ranplan Group 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Ranplan Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ranplan is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Lime Technologies 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Lime Technologies AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lime Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ranplan and Lime Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ranplan and Lime Technologies

The main advantage of trading using opposite Ranplan and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranplan 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.
The idea behind Ranplan Group and Lime Technologies AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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