Correlation Between Lyko Group and Nelly Group

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

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

Diversification Opportunities for Lyko Group and Nelly Group

0.0

Correlation Coefficient

Lyko Group  Nelly Group

Pay attention - limited upside

The 3 months correlation between Lyko and Nelly is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lyko Group A and Nelly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelly Group AB and Lyko 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 Lyko Group A are associated (or correlated) with Nelly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelly Group AB has no effect on the direction of Lyko Group i.e., Lyko Group and Nelly Group go up and down completely randomly.

Pair Corralation between Lyko Group and Nelly Group

If you would invest  0.00  in Nelly Group AB on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Nelly Group AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Lyko Group A  vs.  Nelly Group AB

Lyko Group A

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Lyko Group A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nelly Group AB

Risk-Adjusted Performance

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Modest

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

Pair Trading with Lyko Group and Nelly Group

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

The idea behind Lyko Group A and Nelly 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.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.