Correlation Between Essity AB and Lindab International
Specify exactly 2 symbols:
By analyzing existing cross correlation between Essity AB and Lindab International AB, you can compare the effects of market volatilities on Essity 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 Essity AB with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essity AB and Lindab International.
Diversification Opportunities for Essity AB and Lindab International
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Essity and Lindab is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Essity 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 Essity 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 Essity 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 Essity AB i.e., Essity AB and Lindab International go up and down completely randomly.
Pair Corralation between Essity AB and Lindab International
Assuming the 90 days trading horizon Essity AB is expected to generate 1.51 times less return on investment than Lindab International. But when comparing it to its historical volatility, Essity AB is 1.87 times less risky than Lindab International. It trades about 0.08 of its potential returns per unit of risk. Lindab International AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17,213 in Lindab International AB on September 1, 2024 and sell it today you would earn a total of 5,547 from holding Lindab International AB or generate 32.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Essity AB vs. Lindab International AB
Performance |
| Timeline |
| Essity AB |
| Lindab International |
Essity AB and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essity AB and Lindab International
The main advantage of trading using opposite Essity AB and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essity 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.| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |