Correlation Between Lundin Energy and Koios Beverage

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

By analyzing existing cross correlation between Lundin Energy AB and Koios Beverage Corp, you can compare the effects of market volatilities on Lundin Energy and Koios Beverage 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 Lundin Energy with a short position of Koios Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and Koios Beverage.

Diversification Opportunities for Lundin Energy and Koios Beverage

-0.45

Correlation Coefficient

Lundin Energy  Koios Beverage

Very good diversification

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

Pair Corralation between Lundin Energy and Koios Beverage

Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the Koios Beverage. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lundin Energy AB is 64.45 times less risky than Koios Beverage. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Koios Beverage Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1.40  in Koios Beverage Corp on December 29, 2024 and sell it today you would earn a total of  21.60  from holding Koios Beverage Corp or generate 1542.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.13%
Values	Daily Returns

Lundin Energy AB  vs.  Koios Beverage Corp

Lundin Energy AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lundin Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Koios Beverage Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Koios Beverage Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Koios Beverage reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lundin Energy and Koios Beverage

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

The idea behind Lundin Energy AB and Koios Beverage Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.