Correlation Between Lammhults Design and Malmbergs Elektriska

Can any of the company-specific risk be diversified away by investing in both Lammhults Design and Malmbergs Elektriska 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 Malmbergs Elektriska 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 Malmbergs Elektriska AB, you can compare the effects of market volatilities on Lammhults Design and Malmbergs Elektriska 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 Malmbergs Elektriska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lammhults Design and Malmbergs Elektriska.

Diversification Opportunities for Lammhults Design and Malmbergs Elektriska

0.02

Correlation Coefficient

Lammhults Design  Malmbergs Elektriska

Significant diversification

The 3 months correlation between Lammhults and Malmbergs is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lammhults Design Group and Malmbergs Elektriska AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malmbergs Elektriska 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 Malmbergs Elektriska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malmbergs Elektriska has no effect on the direction of Lammhults Design i.e., Lammhults Design and Malmbergs Elektriska go up and down completely randomly.

Pair Corralation between Lammhults Design and Malmbergs Elektriska

Assuming the 90 days trading horizon Lammhults Design Group is expected to generate 0.88 times more return on investment than Malmbergs Elektriska. However, Lammhults Design Group is 1.14 times less risky than Malmbergs Elektriska. It trades about 0.06 of its potential returns per unit of risk. Malmbergs Elektriska AB is currently generating about 0.01 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lammhults Design Group  vs.  Malmbergs Elektriska 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.

Malmbergs Elektriska

Risk-Adjusted Performance

Very Weak

Over the last 90 days Malmbergs Elektriska AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Malmbergs Elektriska is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lammhults Design and Malmbergs Elektriska

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

The idea behind Lammhults Design Group and Malmbergs Elektriska 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.