Correlation Between SaltX Technology and Lipum AB
Can any of the company-specific risk be diversified away by investing in both SaltX Technology and Lipum AB 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 SaltX Technology and Lipum AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SaltX Technology Holding and Lipum AB, you can compare the effects of market volatilities on SaltX Technology and Lipum AB 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 SaltX Technology with a short position of Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SaltX Technology and Lipum AB.
Diversification Opportunities for SaltX Technology and Lipum AB
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SaltX and Lipum is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SaltX Technology Holding and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB and SaltX Technology 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 SaltX Technology Holding are associated (or correlated) with Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of SaltX Technology i.e., SaltX Technology and Lipum AB go up and down completely randomly.
Pair Corralation between SaltX Technology and Lipum AB
Assuming the 90 days trading horizon SaltX Technology is expected to generate 1.8 times less return on investment than Lipum AB. In addition to that, SaltX Technology is 1.81 times more volatile than Lipum AB. It trades about 0.06 of its total potential returns per unit of risk. Lipum AB is currently generating about 0.2 per unit of volatility. If you would invest 1,450 in Lipum AB on August 31, 2024 and sell it today you would earn a total of 170.00 from holding Lipum AB or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SaltX Technology Holding vs. Lipum AB
Performance |
| Timeline |
| SaltX Technology Holding |
| Lipum AB |
SaltX Technology and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SaltX Technology and Lipum AB
The main advantage of trading using opposite SaltX Technology and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SaltX Technology position performs unexpectedly, Lipum AB 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| SaltX Technology vs. GomSpace Group AB | SaltX Technology vs. Fingerprint Cards AB | SaltX Technology vs. Maha Energy AB | SaltX Technology vs. SolTech Energy Sweden |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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