Correlation Between Lagercrantz Group and Precio Fishbone

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

Diversification Opportunities for Lagercrantz Group and Precio Fishbone

-0.52

Correlation Coefficient

Lagercrantz Group  Precio Fishbone

Excellent diversification

The 3 months correlation between Lagercrantz and Precio is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Precio Fishbone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precio Fishbone 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 Precio Fishbone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precio Fishbone AB has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Precio Fishbone go up and down completely randomly.

Pair Corralation between Lagercrantz Group and Precio Fishbone

Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.91 times more return on investment than Precio Fishbone. However, Lagercrantz Group AB is 1.1 times less risky than Precio Fishbone. It trades about 0.14 of its potential returns per unit of risk. Precio Fishbone AB is currently generating about 0.04 per unit of risk. If you would invest  19,800  in Lagercrantz Group AB on November 29, 2024 and sell it today you would earn a total of  2,980  from holding Lagercrantz Group AB or generate 15.05% return on investment over 90 days.

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

Lagercrantz Group AB  vs.  Precio Fishbone AB

Lagercrantz Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lagercrantz Group AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Lagercrantz Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Precio Fishbone AB

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Lagercrantz Group and Precio Fishbone

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

The idea behind Lagercrantz Group AB and Precio Fishbone 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.