Correlation Between TalkPool and Lidds AB
Can any of the company-specific risk be diversified away by investing in both TalkPool 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 TalkPool and Lidds AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TalkPool AG and Lidds AB, you can compare the effects of market volatilities on TalkPool 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 TalkPool with a short position of Lidds AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of TalkPool and Lidds AB.
Diversification Opportunities for TalkPool and Lidds AB
Average diversification
The 3 months correlation between TalkPool and Lidds is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding TalkPool AG and Lidds AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lidds AB and TalkPool 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 TalkPool AG 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 TalkPool i.e., TalkPool and Lidds AB go up and down completely randomly.
Pair Corralation between TalkPool and Lidds AB
Assuming the 90 days trading horizon TalkPool AG is expected to under-perform the Lidds AB. But the stock apears to be less risky and, when comparing its historical volatility, TalkPool AG is 2.52 times less risky than Lidds AB. The stock trades about -0.05 of its potential returns per unit of risk. The Lidds AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Lidds AB on August 29, 2024 and sell it today you would lose (3.00) from holding Lidds AB or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TalkPool AG vs. Lidds AB
Performance |
| Timeline |
| TalkPool AG |
| Lidds AB |
TalkPool and Lidds AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TalkPool and Lidds AB
The main advantage of trading using opposite TalkPool and Lidds AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TalkPool 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.| TalkPool vs. Embracer Group AB | TalkPool vs. Samhllsbyggnadsbolaget i Norden | TalkPool vs. Evolution AB | TalkPool vs. Stillfront Group AB |
| Lidds AB vs. GomSpace Group AB | Lidds AB vs. Hansa Biopharma AB | Lidds AB vs. Zealand Pharma AS | Lidds AB vs. BioInvent International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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