Correlation Between Veg Of and Lipigon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Veg Of and Lipigon Pharmaceuticals 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 Veg Of and Lipigon Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veg of Lund and Lipigon Pharmaceuticals AB, you can compare the effects of market volatilities on Veg Of and Lipigon Pharmaceuticals 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 Veg Of with a short position of Lipigon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veg Of and Lipigon Pharmaceuticals.
Diversification Opportunities for Veg Of and Lipigon Pharmaceuticals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Veg and Lipigon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Veg of Lund and Lipigon Pharmaceuticals AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipigon Pharmaceuticals and Veg Of 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 Veg of Lund are associated (or correlated) with Lipigon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipigon Pharmaceuticals has no effect on the direction of Veg Of i.e., Veg Of and Lipigon Pharmaceuticals go up and down completely randomly.
Pair Corralation between Veg Of and Lipigon Pharmaceuticals
Assuming the 90 days trading horizon Veg of Lund is expected to under-perform the Lipigon Pharmaceuticals. In addition to that, Veg Of is 1.18 times more volatile than Lipigon Pharmaceuticals AB. It trades about -0.11 of its total potential returns per unit of risk. Lipigon Pharmaceuticals AB is currently generating about -0.03 per unit of volatility. If you would invest 28.00 in Lipigon Pharmaceuticals AB on September 3, 2024 and sell it today you would lose (11.00) from holding Lipigon Pharmaceuticals AB or give up 39.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veg of Lund vs. Lipigon Pharmaceuticals AB
Performance |
| Timeline |
| Veg of Lund |
| Lipigon Pharmaceuticals |
Veg Of and Lipigon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veg Of and Lipigon Pharmaceuticals
The main advantage of trading using opposite Veg Of and Lipigon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veg Of position performs unexpectedly, Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals will offset losses from the drop in Lipigon Pharmaceuticals' long position.The idea behind Veg of Lund and Lipigon Pharmaceuticals AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lipigon Pharmaceuticals vs. Simris Alg AB | Lipigon Pharmaceuticals vs. Immunovia publ AB | Lipigon Pharmaceuticals vs. Sedana Medical AB | Lipigon Pharmaceuticals vs. KABE 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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