Correlation Between TietoEVRY Corp and Lagercrantz Group
Can any of the company-specific risk be diversified away by investing in both TietoEVRY Corp and Lagercrantz 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 TietoEVRY Corp and Lagercrantz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TietoEVRY Corp and Lagercrantz Group AB, you can compare the effects of market volatilities on TietoEVRY Corp and Lagercrantz 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 TietoEVRY Corp with a short position of Lagercrantz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TietoEVRY Corp and Lagercrantz Group.
Diversification Opportunities for TietoEVRY Corp and Lagercrantz Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TietoEVRY and Lagercrantz is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding TietoEVRY Corp and Lagercrantz Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagercrantz Group and TietoEVRY Corp 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 TietoEVRY Corp are associated (or correlated) with Lagercrantz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagercrantz Group has no effect on the direction of TietoEVRY Corp i.e., TietoEVRY Corp and Lagercrantz Group go up and down completely randomly.
Pair Corralation between TietoEVRY Corp and Lagercrantz Group
Assuming the 90 days trading horizon TietoEVRY Corp is expected to under-perform the Lagercrantz Group. But the stock apears to be less risky and, when comparing its historical volatility, TietoEVRY Corp is 1.12 times less risky than Lagercrantz Group. The stock trades about -0.19 of its potential returns per unit of risk. The Lagercrantz Group AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,290 in Lagercrantz Group AB on January 31, 2024 and sell it today you would earn a total of 290.00 from holding Lagercrantz Group AB or generate 1.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
TietoEVRY Corp vs. Lagercrantz Group AB
Performance |
Timeline |
TietoEVRY Corp |
Lagercrantz Group |
TietoEVRY Corp and Lagercrantz Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TietoEVRY Corp and Lagercrantz Group
The main advantage of trading using opposite TietoEVRY Corp and Lagercrantz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TietoEVRY Corp position performs unexpectedly, Lagercrantz 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 Lagercrantz Group will offset losses from the drop in Lagercrantz Group's long position.TietoEVRY Corp vs. FormPipe Software AB | TietoEVRY Corp vs. Micro Systemation AB | TietoEVRY Corp vs. CTT Systems AB | TietoEVRY Corp vs. G5 Entertainment publ |
Lagercrantz Group vs. FormPipe Software AB | Lagercrantz Group vs. Micro Systemation AB | Lagercrantz Group vs. CTT Systems AB | Lagercrantz Group vs. G5 Entertainment publ |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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