Correlation Between Beijer Ref and NIBE Industrier
Can any of the company-specific risk be diversified away by investing in both Beijer Ref and NIBE Industrier 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 Beijer Ref and NIBE Industrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijer Ref AB and NIBE Industrier AB, you can compare the effects of market volatilities on Beijer Ref and NIBE Industrier 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 Beijer Ref with a short position of NIBE Industrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijer Ref and NIBE Industrier.
Diversification Opportunities for Beijer Ref and NIBE Industrier
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Beijer and NIBE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Beijer Ref AB and NIBE Industrier AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIBE Industrier AB and Beijer Ref 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 Beijer Ref AB are associated (or correlated) with NIBE Industrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIBE Industrier AB has no effect on the direction of Beijer Ref i.e., Beijer Ref and NIBE Industrier go up and down completely randomly.
Pair Corralation between Beijer Ref and NIBE Industrier
Assuming the 90 days trading horizon Beijer Ref AB is expected to generate 0.87 times more return on investment than NIBE Industrier. However, Beijer Ref AB is 1.15 times less risky than NIBE Industrier. It trades about 0.08 of its potential returns per unit of risk. NIBE Industrier AB is currently generating about -0.03 per unit of risk. If you would invest 11,149 in Beijer Ref AB on September 1, 2024 and sell it today you would earn a total of 6,051 from holding Beijer Ref AB or generate 54.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijer Ref AB vs. NIBE Industrier AB
Performance |
| Timeline |
| Beijer Ref AB |
| NIBE Industrier AB |
Beijer Ref and NIBE Industrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijer Ref and NIBE Industrier
The main advantage of trading using opposite Beijer Ref and NIBE Industrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijer Ref position performs unexpectedly, NIBE Industrier 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 NIBE Industrier will offset losses from the drop in NIBE Industrier's long position.| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier AB |
| NIBE Industrier vs. Hexagon AB | NIBE Industrier vs. Investor AB ser | NIBE Industrier vs. Investment AB Latour | NIBE Industrier vs. ASSA ABLOY AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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