Correlation Between Nimbus Group and Dometic Group
Can any of the company-specific risk be diversified away by investing in both Nimbus Group and Dometic Group 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 Nimbus Group and Dometic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nimbus Group AB and Dometic Group AB, you can compare the effects of market volatilities on Nimbus Group and Dometic Group 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 Nimbus Group with a short position of Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nimbus Group and Dometic Group.
Diversification Opportunities for Nimbus Group and Dometic Group
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nimbus and Dometic is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nimbus Group AB and Dometic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dometic Group AB and Nimbus Group 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 Nimbus Group AB are associated (or correlated) with Dometic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dometic Group AB has no effect on the direction of Nimbus Group i.e., Nimbus Group and Dometic Group go up and down completely randomly.
Pair Corralation between Nimbus Group and Dometic Group
Assuming the 90 days trading horizon Nimbus Group is expected to generate 1.12 times less return on investment than Dometic Group. But when comparing it to its historical volatility, Nimbus Group AB is 1.03 times less risky than Dometic Group. It trades about 0.04 of its potential returns per unit of risk. Dometic Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,200 in Dometic Group AB on October 22, 2024 and sell it today you would earn a total of 55.00 from holding Dometic Group AB or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nimbus Group AB vs. Dometic Group AB
Performance |
| Timeline |
| Nimbus Group AB |
| Dometic Group AB |
Nimbus Group and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nimbus Group and Dometic Group
The main advantage of trading using opposite Nimbus Group and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nimbus Group position performs unexpectedly, Dometic Group 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 Dometic Group will offset losses from the drop in Dometic Group's long position.| Nimbus Group vs. Dometic Group AB | Nimbus Group vs. Garo AB | Nimbus Group vs. Byggmax Group AB | Nimbus Group vs. Nordnet AB |
| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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