Correlation Between Lipum AB and Tangiamo Touch

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

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

Diversification Opportunities for Lipum AB and Tangiamo Touch

-0.39

Correlation Coefficient

Lipum AB  Tangiamo Touch

Very good diversification

The 3 months correlation between Lipum and Tangiamo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lipum AB and Tangiamo Touch Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangiamo Touch Technology and Lipum 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 Lipum AB are associated (or correlated) with Tangiamo Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangiamo Touch Technology has no effect on the direction of Lipum AB i.e., Lipum AB and Tangiamo Touch go up and down completely randomly.

Pair Corralation between Lipum AB and Tangiamo Touch

Assuming the 90 days trading horizon Lipum AB is expected to generate 0.24 times more return on investment than Tangiamo Touch. However, Lipum AB is 4.09 times less risky than Tangiamo Touch. It trades about 0.1 of its potential returns per unit of risk. Tangiamo Touch Technology is currently generating about -0.01 per unit of risk. If you would invest  1,170  in Lipum AB on September 2, 2024 and sell it today you would earn a total of  260.00  from holding Lipum AB or generate 22.22% return on investment over 90 days.

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

Lipum AB  vs.  Tangiamo Touch Technology

Lipum AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lipum AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lipum AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tangiamo Touch Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tangiamo Touch Technology 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 Lipum AB and Tangiamo Touch

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

The idea behind Lipum AB and Tangiamo Touch Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.