Correlation Between BioInvent International and Lindab International
Can any of the company-specific risk be diversified away by investing in both BioInvent International 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 BioInvent International and Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioInvent International AB and Lindab International AB, you can compare the effects of market volatilities on BioInvent International 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 BioInvent International with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Lindab International.
Diversification Opportunities for BioInvent International and Lindab International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BioInvent and Lindab is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International 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 BioInvent International 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 BioInvent International 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 BioInvent International i.e., BioInvent International and Lindab International go up and down completely randomly.
Pair Corralation between BioInvent International and Lindab International
Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Lindab International. In addition to that, BioInvent International is 1.23 times more volatile than Lindab International AB. It trades about -0.38 of its total potential returns per unit of risk. Lindab International AB is currently generating about -0.19 per unit of volatility. If you would invest 22,460 in Lindab International AB on November 5, 2024 and sell it today you would lose (2,630) from holding Lindab International AB or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioInvent International AB vs. Lindab International AB
Performance |
| Timeline |
| BioInvent International |
| Lindab International |
BioInvent International and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and Lindab International
The main advantage of trading using opposite BioInvent International and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International 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.| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides AB |
| Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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