Correlation Between Garo AB and Nordic Waterproofing
Can any of the company-specific risk be diversified away by investing in both Garo AB and Nordic Waterproofing 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 Nordic Waterproofing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garo AB and Nordic Waterproofing Holding, you can compare the effects of market volatilities on Garo AB and Nordic Waterproofing 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 Nordic Waterproofing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garo AB and Nordic Waterproofing.
Diversification Opportunities for Garo AB and Nordic Waterproofing
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garo and Nordic is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Garo AB and Nordic Waterproofing Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Waterproofing 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 Nordic Waterproofing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Waterproofing has no effect on the direction of Garo AB i.e., Garo AB and Nordic Waterproofing go up and down completely randomly.
Pair Corralation between Garo AB and Nordic Waterproofing
Assuming the 90 days trading horizon Garo AB is expected to under-perform the Nordic Waterproofing. In addition to that, Garo AB is 1.87 times more volatile than Nordic Waterproofing Holding. It trades about -0.11 of its total potential returns per unit of risk. Nordic Waterproofing Holding is currently generating about 0.03 per unit of volatility. If you would invest 14,575 in Nordic Waterproofing Holding on August 28, 2024 and sell it today you would earn a total of 2,985 from holding Nordic Waterproofing Holding or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Garo AB vs. Nordic Waterproofing Holding
Performance |
| Timeline |
| Garo AB |
| Nordic Waterproofing |
Garo AB and Nordic Waterproofing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garo AB and Nordic Waterproofing
The main advantage of trading using opposite Garo AB and Nordic Waterproofing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garo AB position performs unexpectedly, Nordic Waterproofing 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 Nordic Waterproofing will offset losses from the drop in Nordic Waterproofing's long position.| Garo AB vs. Addtech AB | Garo AB vs. Teqnion AB | Garo AB vs. Vitec Software Group | Garo AB vs. Lagercrantz Group AB |
| Nordic Waterproofing vs. Bufab Holding AB | Nordic Waterproofing vs. Garo AB | Nordic Waterproofing vs. Inwido AB | Nordic Waterproofing vs. CTT Systems 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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