Correlation Between Sinch AB and Lime Technologies
Can any of the company-specific risk be diversified away by investing in both Sinch AB 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 Sinch AB and Lime Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and Lime Technologies AB, you can compare the effects of market volatilities on Sinch AB 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 Sinch AB with a short position of Lime Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and Lime Technologies.
Diversification Opportunities for Sinch AB and Lime Technologies
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sinch and Lime is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sinch 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 Sinch AB 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 Sinch 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 Sinch AB i.e., Sinch AB and Lime Technologies go up and down completely randomly.
Pair Corralation between Sinch AB and Lime Technologies
Assuming the 90 days trading horizon Sinch AB is expected to generate 0.99 times more return on investment than Lime Technologies. However, Sinch AB is 1.02 times less risky than Lime Technologies. It trades about 0.07 of its potential returns per unit of risk. Lime Technologies AB is currently generating about 0.07 per unit of risk. If you would invest 2,039 in Sinch AB on October 26, 2024 and sell it today you would earn a total of 127.00 from holding Sinch AB or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinch AB vs. Lime Technologies AB
Performance |
| Timeline |
| Sinch AB |
| Lime Technologies |
Sinch AB and Lime Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and Lime Technologies
The main advantage of trading using opposite Sinch AB and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB 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.| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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