Correlation Between Lime Technologies and Rugvista Group

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

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

Diversification Opportunities for Lime Technologies and Rugvista Group

0.12

Correlation Coefficient

Lime Technologies  Rugvista Group

Average diversification

The 3 months correlation between Lime and Rugvista is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Rugvista Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugvista Group AB and Lime Technologies 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 Lime Technologies AB are associated (or correlated) with Rugvista Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugvista Group AB has no effect on the direction of Lime Technologies i.e., Lime Technologies and Rugvista Group go up and down completely randomly.

Pair Corralation between Lime Technologies and Rugvista Group

Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 1.03 times more return on investment than Rugvista Group. However, Lime Technologies is 1.03 times more volatile than Rugvista Group AB. It trades about 0.05 of its potential returns per unit of risk. Rugvista Group AB is currently generating about 0.01 per unit of risk. If you would invest  22,952  in Lime Technologies AB on October 12, 2024 and sell it today you would earn a total of  12,698  from holding Lime Technologies AB or generate 55.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Lime Technologies AB  vs.  Rugvista Group AB

Lime Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lime Technologies AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lime Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Rugvista Group AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rugvista Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Rugvista Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lime Technologies and Rugvista Group

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

The idea behind Lime Technologies AB and Rugvista 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.