Correlation Between Lammhults Design and Dedicare

Can any of the company-specific risk be diversified away by investing in both Lammhults Design and Dedicare 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 Lammhults Design and Dedicare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lammhults Design Group and Dedicare AB, you can compare the effects of market volatilities on Lammhults Design and Dedicare 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 Lammhults Design with a short position of Dedicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lammhults Design and Dedicare.

Diversification Opportunities for Lammhults Design and Dedicare

-0.42

Correlation Coefficient

Lammhults Design  Dedicare

Very good diversification

The 3 months correlation between Lammhults and Dedicare is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lammhults Design Group and Dedicare AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dedicare AB and Lammhults Design 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 Lammhults Design Group are associated (or correlated) with Dedicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dedicare AB has no effect on the direction of Lammhults Design i.e., Lammhults Design and Dedicare go up and down completely randomly.

Pair Corralation between Lammhults Design and Dedicare

Assuming the 90 days trading horizon Lammhults Design Group is expected to generate 1.25 times more return on investment than Dedicare. However, Lammhults Design is 1.25 times more volatile than Dedicare AB. It trades about 0.06 of its potential returns per unit of risk. Dedicare AB is currently generating about 0.05 per unit of risk. If you would invest  3,447  in Lammhults Design Group on April 25, 2025 and sell it today you would earn a total of  233.00  from holding Lammhults Design Group or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lammhults Design Group  vs.  Dedicare AB

Lammhults Design

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lammhults Design Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Lammhults Design may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dedicare AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dedicare AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dedicare is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lammhults Design and Dedicare

The main advantage of trading using opposite Lammhults Design and Dedicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lammhults Design position performs unexpectedly, Dedicare 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 Dedicare will offset losses from the drop in Dedicare's long position.

The idea behind Lammhults Design Group and Dedicare 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.