Correlation Between Lindab International and BioInvent International
Can any of the company-specific risk be diversified away by investing in both Lindab International and BioInvent International 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 BioInvent International 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 BioInvent International AB, you can compare the effects of market volatilities on Lindab International and BioInvent International 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 BioInvent International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and BioInvent International.
Diversification Opportunities for Lindab International and BioInvent International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lindab and BioInvent is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International 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 BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of Lindab International i.e., Lindab International and BioInvent International go up and down completely randomly.
Pair Corralation between Lindab International and BioInvent International
Assuming the 90 days trading horizon Lindab International AB is expected to generate 0.81 times more return on investment than BioInvent International. However, Lindab International AB is 1.23 times less risky than BioInvent International. It trades about -0.19 of its potential returns per unit of risk. BioInvent International AB is currently generating about -0.38 per unit of risk. If you would invest 22,460 in Lindab International AB on November 5, 2024 and sell it today you would lose (2,630) from holding Lindab International AB or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindab International AB vs. BioInvent International AB
Performance |
| Timeline |
| Lindab International |
| BioInvent International |
Lindab International and BioInvent International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and BioInvent International
The main advantage of trading using opposite Lindab International and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, BioInvent International 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 BioInvent International will offset losses from the drop in BioInvent International's long position.| Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab AB |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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