Correlation Between Bilia AB and Lindab International
Can any of the company-specific risk be diversified away by investing in both Bilia AB and Lindab International 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 Bilia AB and Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilia AB and Lindab International AB, you can compare the effects of market volatilities on Bilia AB and Lindab International 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 Bilia AB with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilia AB and Lindab International.
Diversification Opportunities for Bilia AB and Lindab International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bilia and Lindab is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bilia AB and Lindab International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindab International and Bilia 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 Bilia AB are associated (or correlated) with Lindab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindab International has no effect on the direction of Bilia AB i.e., Bilia AB and Lindab International go up and down completely randomly.
Pair Corralation between Bilia AB and Lindab International
Assuming the 90 days trading horizon Bilia AB is expected to under-perform the Lindab International. In addition to that, Bilia AB is 1.13 times more volatile than Lindab International AB. It trades about -0.01 of its total potential returns per unit of risk. Lindab International AB is currently generating about 0.05 per unit of volatility. If you would invest 22,430 in Lindab International AB on August 31, 2024 and sell it today you would earn a total of 330.00 from holding Lindab International AB or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilia AB vs. Lindab International AB
Performance |
| Timeline |
| Bilia AB |
| Lindab International |
Bilia AB and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilia AB and Lindab International
The main advantage of trading using opposite Bilia AB and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilia AB position performs unexpectedly, Lindab International 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 Lindab International will offset losses from the drop in Lindab International's long position.The idea behind Bilia AB and Lindab International 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.| Lindab International vs. Samhllsbyggnadsbolaget i Norden | Lindab International vs. Sinch AB | Lindab International vs. Embracer Group AB | Lindab International vs. Evolution 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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