Correlation Between Lemonsoft Oyj and Sitowise Group

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

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

Diversification Opportunities for Lemonsoft Oyj and Sitowise Group

0.0

Correlation Coefficient

Lemonsoft Oyj  Sitowise Group

Pay attention - limited upside

The 3 months correlation between Lemonsoft and Sitowise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lemonsoft Oyj and Sitowise Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitowise Group Oyj and Lemonsoft Oyj 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 Lemonsoft Oyj are associated (or correlated) with Sitowise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitowise Group Oyj has no effect on the direction of Lemonsoft Oyj i.e., Lemonsoft Oyj and Sitowise Group go up and down completely randomly.

Pair Corralation between Lemonsoft Oyj and Sitowise Group

If you would invest (100.00) in Sitowise Group Oyj on January 28, 2024 and sell it today you would earn a total of  100.00  from holding Sitowise Group Oyj or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lemonsoft Oyj  vs.  Sitowise Group Oyj

Lemonsoft Oyj

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Lemonsoft Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Sitowise Group Oyj

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with Lemonsoft Oyj and Sitowise Group

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

The idea behind Lemonsoft Oyj and Sitowise Group Oyj 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.