Correlation Between Stillfront Group and Lime Technologies
Can any of the company-specific risk be diversified away by investing in both Stillfront Group 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 Stillfront Group and Lime Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stillfront Group AB and Lime Technologies AB, you can compare the effects of market volatilities on Stillfront Group 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 Stillfront Group with a short position of Lime Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stillfront Group and Lime Technologies.
Diversification Opportunities for Stillfront Group and Lime Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stillfront and Lime is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and Stillfront 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 Stillfront Group AB 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 Stillfront Group i.e., Stillfront Group and Lime Technologies go up and down completely randomly.
Pair Corralation between Stillfront Group and Lime Technologies
Assuming the 90 days horizon Stillfront Group AB is expected to under-perform the Lime Technologies. In addition to that, Stillfront Group is 1.22 times more volatile than Lime Technologies AB. It trades about -0.04 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 23,383 in Lime Technologies AB on November 5, 2024 and sell it today you would earn a total of 11,617 from holding Lime Technologies AB or generate 49.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stillfront Group AB vs. Lime Technologies AB
Performance |
| Timeline |
| Stillfront Group |
| Lime Technologies |
Stillfront Group and Lime Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stillfront Group and Lime Technologies
The main advantage of trading using opposite Stillfront Group and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillfront Group 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.| Stillfront Group vs. Embracer Group AB | Stillfront Group vs. Sinch AB | Stillfront Group vs. Paradox Interactive AB | Stillfront Group vs. Evolution AB |
| Lime Technologies vs. Vitec Software Group | Lime Technologies vs. MIPS AB | Lime Technologies vs. Sinch AB | Lime Technologies vs. Stillfront Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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