Correlation Between Lime Technologies and Neola Medical

Can any of the company-specific risk be diversified away by investing in both Lime Technologies and Neola Medical 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 Neola Medical 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 Neola Medical AB, you can compare the effects of market volatilities on Lime Technologies and Neola Medical 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 Neola Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lime Technologies and Neola Medical.

Diversification Opportunities for Lime Technologies and Neola Medical

-0.01

Correlation Coefficient

Lime Technologies  Neola Medical

Good diversification

The 3 months correlation between Lime and Neola is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lime Technologies AB and Neola Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neola Medical 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 Neola Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neola Medical AB has no effect on the direction of Lime Technologies i.e., Lime Technologies and Neola Medical go up and down completely randomly.

Pair Corralation between Lime Technologies and Neola Medical

Assuming the 90 days trading horizon Lime Technologies AB is expected to generate 0.76 times more return on investment than Neola Medical. However, Lime Technologies AB is 1.32 times less risky than Neola Medical. It trades about -0.02 of its potential returns per unit of risk. Neola Medical AB is currently generating about -0.02 per unit of risk. If you would invest  38,400  in Lime Technologies AB on May 5, 2025 and sell it today you would lose (1,050) from holding Lime Technologies AB or give up 2.73% of portfolio value over 90 days.

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

Lime Technologies AB  vs.  Neola Medical AB

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 comparatively stable basic indicators, Lime Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Neola Medical AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neola Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Neola Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lime Technologies and Neola Medical

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

The idea behind Lime Technologies AB and Neola Medical 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 Transaction History module to view history of all your transactions and understand their impact on performance.