Correlation Between Lindab International and BE Group
Can any of the company-specific risk be diversified away by investing in both Lindab International and BE 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 Lindab International and BE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindab International AB and BE Group AB, you can compare the effects of market volatilities on Lindab International and BE 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 Lindab International with a short position of BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and BE Group.
Diversification Opportunities for Lindab International and BE Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lindab and BEGR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Group AB and Lindab International 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 Lindab International AB are associated (or correlated) with BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Lindab International i.e., Lindab International and BE Group go up and down completely randomly.
Pair Corralation between Lindab International and BE Group
Assuming the 90 days trading horizon Lindab International AB is expected to generate 1.34 times more return on investment than BE Group. However, Lindab International is 1.34 times more volatile than BE Group AB. It trades about 0.07 of its potential returns per unit of risk. BE Group AB is currently generating about -0.31 per unit of risk. If you would invest 22,885 in Lindab International AB on August 29, 2024 and sell it today you would earn a total of 555.00 from holding Lindab International AB or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindab International AB vs. BE Group AB
Performance |
| Timeline |
| Lindab International |
| BE Group AB |
Lindab International and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and BE Group
The main advantage of trading using opposite Lindab International and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, BE 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 BE Group will offset losses from the drop in BE Group's long position.| Lindab International vs. Addtech AB | Lindab International vs. Teqnion AB | Lindab International vs. Vitec Software Group | Lindab International vs. Lagercrantz Group AB |
| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |