Correlation Between Lagercrantz Group and Avensia Publ

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

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

Diversification Opportunities for Lagercrantz Group and Avensia Publ

-0.77

Correlation Coefficient

Lagercrantz Group  Avensia Publ

Pay attention - limited upside

The 3 months correlation between Lagercrantz and Avensia is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ AB and Lagercrantz Group 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 Lagercrantz Group AB are associated (or correlated) with Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Avensia Publ go up and down completely randomly.

Pair Corralation between Lagercrantz Group and Avensia Publ

Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.98 times more return on investment than Avensia Publ. However, Lagercrantz Group AB is 1.02 times less risky than Avensia Publ. It trades about 0.05 of its potential returns per unit of risk. Avensia publ AB is currently generating about -0.09 per unit of risk. If you would invest  18,900  in Lagercrantz Group AB on September 3, 2024 and sell it today you would earn a total of  900.00  from holding Lagercrantz Group AB or generate 4.76% return on investment over 90 days.

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

Lagercrantz Group AB  vs.  Avensia publ AB

Lagercrantz Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lagercrantz Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Lagercrantz Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Avensia publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avensia publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Lagercrantz Group and Avensia Publ

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

The idea behind Lagercrantz Group AB and Avensia publ 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.