Correlation Between Lindab International and Bilia AB
Can any of the company-specific risk be diversified away by investing in both Lindab International and Bilia AB 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 Bilia AB 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 Bilia AB, you can compare the effects of market volatilities on Lindab International and Bilia AB 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 Bilia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Bilia AB.
Diversification Opportunities for Lindab International and Bilia AB
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lindab and Bilia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Bilia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilia 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 Bilia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilia AB has no effect on the direction of Lindab International i.e., Lindab International and Bilia AB go up and down completely randomly.
Pair Corralation between Lindab International and Bilia AB
Assuming the 90 days trading horizon Lindab International AB is expected to generate 1.48 times more return on investment than Bilia AB. However, Lindab International is 1.48 times more volatile than Bilia AB. It trades about 0.04 of its potential returns per unit of risk. Bilia AB is currently generating about -0.08 per unit of risk. If you would invest 22,055 in Lindab International AB on August 28, 2024 and sell it today you would earn a total of 1,565 from holding Lindab International AB or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindab International AB vs. Bilia AB
Performance |
| Timeline |
| Lindab International |
| Bilia AB |
Lindab International and Bilia AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and Bilia AB
The main advantage of trading using opposite Lindab International and Bilia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, Bilia AB 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 Bilia AB will offset losses from the drop in Bilia AB'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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