Correlation Between Teqnion AB and Lime Technologies

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

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

Diversification Opportunities for Teqnion AB and Lime Technologies

-0.38

Correlation Coefficient

Teqnion AB  Lime Technologies

Very good diversification

The 3 months correlation between Teqnion and Lime is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and Lime Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lime Technologies and Teqnion 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 Teqnion AB 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 Teqnion AB i.e., Teqnion AB and Lime Technologies go up and down completely randomly.

Pair Corralation between Teqnion AB and Lime Technologies

Assuming the 90 days trading horizon Teqnion AB is expected to generate 0.79 times more return on investment than Lime Technologies. However, Teqnion AB is 1.26 times less risky than Lime Technologies. It trades about 0.05 of its potential returns per unit of risk. Lime Technologies AB is currently generating about -0.04 per unit of risk. If you would invest  16,520  in Teqnion AB on December 30, 2024 and sell it today you would earn a total of  980.00  from holding Teqnion AB or generate 5.93% return on investment over 90 days.

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

Teqnion AB  vs.  Lime Technologies AB

Teqnion AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Teqnion AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Teqnion AB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 Teqnion AB and Lime Technologies

The main advantage of trading using opposite Teqnion AB and Lime Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB 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 Teqnion AB 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.