Correlation Between Swedish Orphan and Lidds AB
Can any of the company-specific risk be diversified away by investing in both Swedish Orphan and Lidds 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 Swedish Orphan and Lidds AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedish Orphan Biovitrum and Lidds AB, you can compare the effects of market volatilities on Swedish Orphan and Lidds 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 Swedish Orphan with a short position of Lidds AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedish Orphan and Lidds AB.
Diversification Opportunities for Swedish Orphan and Lidds AB
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swedish and Lidds is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Lidds AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lidds AB and Swedish Orphan 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 Swedish Orphan Biovitrum are associated (or correlated) with Lidds AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lidds AB has no effect on the direction of Swedish Orphan i.e., Swedish Orphan and Lidds AB go up and down completely randomly.
Pair Corralation between Swedish Orphan and Lidds AB
Assuming the 90 days trading horizon Swedish Orphan Biovitrum is expected to generate 0.18 times more return on investment than Lidds AB. However, Swedish Orphan Biovitrum is 5.6 times less risky than Lidds AB. It trades about 0.05 of its potential returns per unit of risk. Lidds AB is currently generating about -0.01 per unit of risk. If you would invest 21,272 in Swedish Orphan Biovitrum on September 12, 2024 and sell it today you would earn a total of 10,168 from holding Swedish Orphan Biovitrum or generate 47.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedish Orphan Biovitrum vs. Lidds AB
Performance |
| Timeline |
| Swedish Orphan Biovitrum |
| Lidds AB |
Swedish Orphan and Lidds AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedish Orphan and Lidds AB
The main advantage of trading using opposite Swedish Orphan and Lidds AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedish Orphan position performs unexpectedly, Lidds 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 Lidds AB will offset losses from the drop in Lidds AB's long position.| Swedish Orphan vs. Getinge AB ser | Swedish Orphan vs. Elekta AB | Swedish Orphan vs. AB SKF | Swedish Orphan vs. Saab AB |
| Lidds AB vs. Mendus AB | Lidds AB vs. Cantargia AB | Lidds AB vs. BioInvent International AB | Lidds AB vs. Isofol Medical 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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