Correlation Between Surgical Science and Lime Technologies

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

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

Diversification Opportunities for Surgical Science and Lime Technologies

-0.56

Correlation Coefficient

Surgical Science  Lime Technologies

Excellent diversification

The 3 months correlation between Surgical and Lime is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with Lime Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lime Technologies has no effect on the direction of Surgical Science i.e., Surgical Science and Lime Technologies go up and down completely randomly.

Pair Corralation between Surgical Science and Lime Technologies

Assuming the 90 days trading horizon Surgical Science Sweden is expected to under-perform the Lime Technologies. In addition to that, Surgical Science is 1.12 times more volatile than Lime Technologies AB. It trades about -0.08 of its total potential returns per unit of risk. Lime Technologies AB is currently generating about -0.04 per unit of volatility. If you would invest  36,850  in Lime Technologies AB on December 30, 2024 and sell it today you would lose (3,550) from holding Lime Technologies AB or give up 9.63% of portfolio value over 90 days.

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

Surgical Science Sweden  vs.  Lime Technologies AB

Surgical Science Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surgical Science Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lime Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lime Technologies AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Surgical Science and Lime Technologies

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

The idea behind Surgical Science Sweden and Lime Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.