Correlation Between Garo AB and Nimbus Group
Can any of the company-specific risk be diversified away by investing in both Garo AB and Nimbus 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 Garo AB and Nimbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garo AB and Nimbus Group AB, you can compare the effects of market volatilities on Garo AB and Nimbus 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 Garo AB with a short position of Nimbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garo AB and Nimbus Group.
Diversification Opportunities for Garo AB and Nimbus Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garo and Nimbus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Garo AB and Nimbus Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimbus Group AB and Garo 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 Garo AB are associated (or correlated) with Nimbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimbus Group AB has no effect on the direction of Garo AB i.e., Garo AB and Nimbus Group go up and down completely randomly.
Pair Corralation between Garo AB and Nimbus Group
Assuming the 90 days trading horizon Garo AB is expected to under-perform the Nimbus Group. In addition to that, Garo AB is 1.06 times more volatile than Nimbus Group AB. It trades about -0.09 of its total potential returns per unit of risk. Nimbus Group AB is currently generating about -0.03 per unit of volatility. If you would invest 3,000 in Nimbus Group AB on September 12, 2024 and sell it today you would lose (1,405) from holding Nimbus Group AB or give up 46.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garo AB vs. Nimbus Group AB
Performance |
| Timeline |
| Garo AB |
| Nimbus Group AB |
Garo AB and Nimbus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garo AB and Nimbus Group
The main advantage of trading using opposite Garo AB and Nimbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garo AB position performs unexpectedly, Nimbus 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 Nimbus Group will offset losses from the drop in Nimbus Group's long position.| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding AB |
| Nimbus Group vs. Dometic Group AB | Nimbus Group vs. Garo AB | Nimbus Group vs. Byggmax Group AB | Nimbus Group vs. Nordnet 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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