Correlation Between Lagercrantz Group and NIBE Industrier
Can any of the company-specific risk be diversified away by investing in both Lagercrantz Group 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 Lagercrantz Group and NIBE Industrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lagercrantz Group AB and NIBE Industrier AB, you can compare the effects of market volatilities on Lagercrantz Group 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 Lagercrantz Group with a short position of NIBE Industrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagercrantz Group and NIBE Industrier.
Diversification Opportunities for Lagercrantz Group and NIBE Industrier
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lagercrantz and NIBE is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lagercrantz Group 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 Lagercrantz 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 Lagercrantz Group 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 Lagercrantz Group i.e., Lagercrantz Group and NIBE Industrier go up and down completely randomly.
Pair Corralation between Lagercrantz Group and NIBE Industrier
Assuming the 90 days trading horizon Lagercrantz Group AB is expected to generate 0.7 times more return on investment than NIBE Industrier. However, Lagercrantz Group AB is 1.42 times less risky than NIBE Industrier. It trades about 0.05 of its potential returns per unit of risk. NIBE Industrier AB is currently generating about -0.02 per unit of risk. If you would invest 17,613 in Lagercrantz Group AB on August 28, 2024 and sell it today you would earn a total of 1,897 from holding Lagercrantz Group AB or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lagercrantz Group AB vs. NIBE Industrier AB
Performance |
| Timeline |
| Lagercrantz Group |
| NIBE Industrier AB |
Lagercrantz Group and NIBE Industrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagercrantz Group and NIBE Industrier
The main advantage of trading using opposite Lagercrantz Group and NIBE Industrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagercrantz Group 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.| Lagercrantz Group vs. Addtech AB | Lagercrantz Group vs. Lifco AB | Lagercrantz Group vs. Indutrade AB | Lagercrantz Group vs. Vitec Software Group |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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