Correlation Between Lagercrantz Group and Karnov Group

Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group and Karnov 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 Lagercrantz Group and Karnov Group 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 Karnov Group AB, you can compare the effects of market volatilities on Lagercrantz Group and Karnov 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 Lagercrantz Group with a short position of Karnov Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and Karnov Group.

Diversification Opportunities for Lagercrantz Group and Karnov Group

0.11

Correlation Coefficient

Lagercrantz Group  Karnov Group

Average diversification

The 3 months correlation between Lagercrantz and Karnov is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Karnov Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karnov Group 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 Karnov Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karnov Group AB has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Karnov Group go up and down completely randomly.

Pair Corralation between Lagercrantz Group and Karnov Group

Assuming the 90 days trading horizon Lagercrantz Group is expected to generate 1.19 times less return on investment than Karnov Group. In addition to that, Lagercrantz Group is 1.14 times more volatile than Karnov Group AB. It trades about 0.05 of its total potential returns per unit of risk. Karnov Group AB is currently generating about 0.06 per unit of volatility. If you would invest  7,650  in Karnov Group AB on September 3, 2024 and sell it today you would earn a total of  470.00  from holding Karnov Group AB or generate 6.14% return on investment over 90 days.

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

Lagercrantz Group AB  vs.  Karnov Group 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.

Karnov Group AB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Karnov Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Karnov Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lagercrantz Group and Karnov Group

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

The idea behind Lagercrantz Group AB and Karnov Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.