Correlation Between Lindab International and Byggmax Group
Can any of the company-specific risk be diversified away by investing in both Lindab International and Byggmax 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 Byggmax 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 Byggmax Group AB, you can compare the effects of market volatilities on Lindab International and Byggmax 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 Byggmax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Byggmax Group.
Diversification Opportunities for Lindab International and Byggmax Group
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lindab and Byggmax is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax 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 Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of Lindab International i.e., Lindab International and Byggmax Group go up and down completely randomly.
Pair Corralation between Lindab International and Byggmax Group
Assuming the 90 days trading horizon Lindab International is expected to generate 24.59 times less return on investment than Byggmax Group. But when comparing it to its historical volatility, Lindab International AB is 1.23 times less risky than Byggmax Group. It trades about 0.0 of its potential returns per unit of risk. Byggmax Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,022 in Byggmax Group AB on August 31, 2024 and sell it today you would earn a total of 374.00 from holding Byggmax Group AB or generate 9.3% 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. Byggmax Group AB
Performance |
| Timeline |
| Lindab International |
| Byggmax Group AB |
Lindab International and Byggmax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and Byggmax Group
The main advantage of trading using opposite Lindab International and Byggmax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, Byggmax 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 Byggmax Group will offset losses from the drop in Byggmax Group's long position.| Lindab International vs. Samhllsbyggnadsbolaget i Norden | Lindab International vs. Sinch AB | Lindab International vs. Embracer Group AB | Lindab International vs. Evolution AB |
| Byggmax Group vs. NetJobs Group AB | Byggmax Group vs. Mantex AB | Byggmax Group vs. Doxa AB | Byggmax Group vs. Clean Motion 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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