Correlation Between Eolus Vind and NIBE Industrier
Can any of the company-specific risk be diversified away by investing in both Eolus Vind 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 Eolus Vind and NIBE Industrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eolus Vind AB and NIBE Industrier AB, you can compare the effects of market volatilities on Eolus Vind 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 Eolus Vind with a short position of NIBE Industrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and NIBE Industrier.
Diversification Opportunities for Eolus Vind and NIBE Industrier
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eolus and NIBE is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind 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 Eolus Vind 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 Eolus Vind 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 Eolus Vind i.e., Eolus Vind and NIBE Industrier go up and down completely randomly.
Pair Corralation between Eolus Vind and NIBE Industrier
Assuming the 90 days trading horizon Eolus Vind AB is expected to under-perform the NIBE Industrier. But the stock apears to be less risky and, when comparing its historical volatility, Eolus Vind AB is 1.24 times less risky than NIBE Industrier. The stock trades about -0.11 of its potential returns per unit of risk. The NIBE Industrier AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 7,005 in NIBE Industrier AB on August 25, 2024 and sell it today you would lose (2,430) from holding NIBE Industrier AB or give up 34.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eolus Vind AB vs. NIBE Industrier AB
Performance |
| Timeline |
| Eolus Vind AB |
| NIBE Industrier AB |
Eolus Vind and NIBE Industrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eolus Vind and NIBE Industrier
The main advantage of trading using opposite Eolus Vind and NIBE Industrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind 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.| Eolus Vind vs. Lifco AB | Eolus Vind vs. Sdiptech AB | Eolus Vind vs. Vitec Software Group | Eolus Vind vs. Addtech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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