Correlation Between Lyko Group and Boozt AB

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

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

Diversification Opportunities for Lyko Group and Boozt AB

0.51

Correlation Coefficient

Lyko Group  Boozt AB

Very weak diversification

The 3 months correlation between Lyko and Boozt is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lyko Group A and Boozt AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boozt AB and Lyko 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 Lyko Group A are associated (or correlated) with Boozt AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boozt AB has no effect on the direction of Lyko Group i.e., Lyko Group and Boozt AB go up and down completely randomly.

Pair Corralation between Lyko Group and Boozt AB

Assuming the 90 days trading horizon Lyko Group A is expected to under-perform the Boozt AB. But the stock apears to be less risky and, when comparing its historical volatility, Lyko Group A is 1.03 times less risky than Boozt AB. The stock trades about -0.04 of its potential returns per unit of risk. The Boozt AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  14,160  in Boozt AB on October 24, 2024 and sell it today you would lose (1,920) from holding Boozt AB or give up 13.56% of portfolio value over 90 days.

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

Lyko Group A  vs.  Boozt AB

Lyko Group A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lyko Group A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Boozt AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boozt AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Boozt AB 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 Lyko Group and Boozt AB

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

The idea behind Lyko Group A and Boozt 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.