Correlation Between Dometic Group and Lindab International
Can any of the company-specific risk be diversified away by investing in both Dometic Group 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 Dometic Group and Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dometic Group AB and Lindab International AB, you can compare the effects of market volatilities on Dometic Group 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 Dometic Group with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Lindab International.
Diversification Opportunities for Dometic Group and Lindab International
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dometic and Lindab is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group 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 Dometic 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 Dometic Group 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 Dometic Group i.e., Dometic Group and Lindab International go up and down completely randomly.
Pair Corralation between Dometic Group and Lindab International
Assuming the 90 days trading horizon Dometic Group AB is expected to generate 0.75 times more return on investment than Lindab International. However, Dometic Group AB is 1.33 times less risky than Lindab International. It trades about -0.01 of its potential returns per unit of risk. Lindab International AB is currently generating about -0.12 per unit of risk. If you would invest 5,200 in Dometic Group AB on November 30, 2024 and sell it today you would lose (85.00) from holding Dometic Group AB or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dometic Group AB vs. Lindab International AB
Performance |
| Timeline |
| Dometic Group AB |
| Lindab International |
Dometic Group and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Lindab International
The main advantage of trading using opposite Dometic Group and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group 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.| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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