Correlation Between Lidds AB and Xintela AB

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

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

Diversification Opportunities for Lidds AB and Xintela AB

-0.26

Correlation Coefficient

Lidds AB  Xintela AB

Very good diversification

The 3 months correlation between Lidds and Xintela is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lidds AB and Xintela AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintela AB and Lidds AB 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 Lidds AB are associated (or correlated) with Xintela AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintela AB has no effect on the direction of Lidds AB i.e., Lidds AB and Xintela AB go up and down completely randomly.

Pair Corralation between Lidds AB and Xintela AB

Assuming the 90 days trading horizon Lidds AB is expected to generate 2.39 times more return on investment than Xintela AB. However, Lidds AB is 2.39 times more volatile than Xintela AB. It trades about 0.16 of its potential returns per unit of risk. Xintela AB is currently generating about 0.07 per unit of risk. If you would invest  3.46  in Lidds AB on April 24, 2025 and sell it today you would earn a total of  4.54  from holding Lidds AB or generate 131.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Lidds AB  vs.  Xintela AB

Lidds AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lidds AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lidds AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Xintela AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xintela AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Xintela AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lidds AB and Xintela AB

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

The idea behind Lidds AB and Xintela 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.