Correlation Between Lidds AB and Klaria Pharma

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

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

Diversification Opportunities for Lidds AB and Klaria Pharma

0.25

Correlation Coefficient

Lidds AB  Klaria Pharma

Modest diversification

The 3 months correlation between Lidds and Klaria is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lidds AB and Klaria Pharma Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaria Pharma Holding and Lidds 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 Lidds AB are associated (or correlated) with Klaria Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaria Pharma Holding has no effect on the direction of Lidds AB i.e., Lidds AB and Klaria Pharma go up and down completely randomly.

Pair Corralation between Lidds AB and Klaria Pharma

Assuming the 90 days trading horizon Lidds AB is expected to generate 3.69 times less return on investment than Klaria Pharma. But when comparing it to its historical volatility, Lidds AB is 1.45 times less risky than Klaria Pharma. It trades about 0.07 of its potential returns per unit of risk. Klaria Pharma Holding is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Klaria Pharma Holding on December 30, 2024 and sell it today you would earn a total of  93.00  from holding Klaria Pharma Holding or generate 273.53% return on investment over 90 days.

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

Lidds AB  vs.  Klaria Pharma Holding

Lidds AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lidds AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lidds AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Klaria Pharma Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klaria Pharma Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Klaria Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lidds AB and Klaria Pharma

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

The idea behind Lidds AB and Klaria Pharma Holding 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.