Correlation Between Lime Technologies and Generic Sweden

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

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

Diversification Opportunities for Lime Technologies and Generic Sweden

0.32

Correlation Coefficient

Lime Technologies  Generic Sweden

Weak diversification

The 3 months correlation between Lime and Generic is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Generic Sweden publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generic Sweden publ and Lime Technologies 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 Lime Technologies AB are associated (or correlated) with Generic Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generic Sweden publ has no effect on the direction of Lime Technologies i.e., Lime Technologies and Generic Sweden go up and down completely randomly.

Pair Corralation between Lime Technologies and Generic Sweden

Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 0.9 times more return on investment than Generic Sweden. However, Lime Technologies AB is 1.11 times less risky than Generic Sweden. It trades about 0.03 of its potential returns per unit of risk. Generic Sweden publ is currently generating about 0.01 per unit of risk. If you would invest  37,114  in Lime Technologies AB on April 23, 2025 and sell it today you would earn a total of  786.00  from holding Lime Technologies AB or generate 2.12% return on investment over 90 days.

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

Lime Technologies AB  vs.  Generic Sweden publ

Lime Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lime Technologies AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Lime Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Generic Sweden publ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Generic Sweden publ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Generic Sweden is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lime Technologies and Generic Sweden

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

The idea behind Lime Technologies AB and Generic Sweden publ 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .