Correlation Between Volvo Car and Lipum AB
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By analyzing existing cross correlation between Volvo Car AB and Lipum AB, you can compare the effects of market volatilities on Volvo Car and Lipum 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 Volvo Car with a short position of Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volvo Car and Lipum AB.
Diversification Opportunities for Volvo Car and Lipum AB
Very good diversification
The 3 months correlation between Volvo and Lipum is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Volvo Car AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB and Volvo Car 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 Volvo Car AB are associated (or correlated) with Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of Volvo Car i.e., Volvo Car and Lipum AB go up and down completely randomly.
Pair Corralation between Volvo Car and Lipum AB
Assuming the 90 days trading horizon Volvo Car AB is expected to under-perform the Lipum AB. In addition to that, Volvo Car is 1.26 times more volatile than Lipum AB. It trades about -0.02 of its total potential returns per unit of risk. Lipum AB is currently generating about 0.21 per unit of volatility. If you would invest 1,480 in Lipum AB on August 30, 2024 and sell it today you would earn a total of 180.00 from holding Lipum AB or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volvo Car AB vs. Lipum AB
Performance |
| Timeline |
| Volvo Car AB |
| Lipum AB |
Volvo Car and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volvo Car and Lipum AB
The main advantage of trading using opposite Volvo Car and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volvo Car position performs unexpectedly, Lipum 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| Volvo Car vs. Samhllsbyggnadsbolaget i Norden | Volvo Car vs. Sinch AB | Volvo Car vs. Investor AB ser | Volvo Car vs. SSAB AB |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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