Correlation Between Lagercrantz Group and Upsales Technology

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

Diversification Opportunities for Lagercrantz Group and Upsales Technology

-0.45

Correlation Coefficient

Lagercrantz Group  Upsales Technology

Very good diversification

The 3 months correlation between Lagercrantz and Upsales is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group AB and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology 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 Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Lagercrantz Group i.e., Lagercrantz Group and Upsales Technology go up and down completely randomly.

Pair Corralation between Lagercrantz Group and Upsales Technology

Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.56 times more return on investment than Upsales Technology. However, Lagercrantz Group AB is 1.78 times less risky than Upsales Technology. It trades about 0.29 of its potential returns per unit of risk. Upsales Technology AB is currently generating about -0.01 per unit of risk. If you would invest  19,560  in Lagercrantz Group AB on September 27, 2024 and sell it today you would earn a total of  1,660  from holding Lagercrantz Group AB or generate 8.49% 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.  Upsales Technology AB

Lagercrantz Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lagercrantz Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Lagercrantz Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators 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.

Pair Trading with Lagercrantz Group and Upsales Technology

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

The idea behind Lagercrantz Group AB and Upsales Technology 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.