Correlation Between Lifeclean International and Investment

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

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

Diversification Opportunities for Lifeclean International and Investment

-0.55

Correlation Coefficient

Lifeclean International  Investment

Excellent diversification

The 3 months correlation between Lifeclean and Investment is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lifeclean International AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund and Lifeclean International 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 Lifeclean International AB are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Lifeclean International i.e., Lifeclean International and Investment go up and down completely randomly.

Pair Corralation between Lifeclean International and Investment

Assuming the 90 days trading horizon Lifeclean International AB is expected to under-perform the Investment. In addition to that, Lifeclean International is 3.96 times more volatile than Investment AB Oresund. It trades about -0.24 of its total potential returns per unit of risk. Investment AB Oresund is currently generating about 0.22 per unit of volatility. If you would invest  11,481  in Investment AB Oresund on April 24, 2025 and sell it today you would earn a total of  1,999  from holding Investment AB Oresund or generate 17.41% return on investment over 90 days.

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

Lifeclean International AB  vs.  Investment AB Oresund

Lifeclean International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifeclean International AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Investment AB Oresund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investment AB Oresund are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifeclean International and Investment

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

The idea behind Lifeclean International AB and Investment AB Oresund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..