Correlation Between Lindab International and Dometic Group
Can any of the company-specific risk be diversified away by investing in both Lindab International and Dometic 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 Dometic 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 Dometic Group AB, you can compare the effects of market volatilities on Lindab International and Dometic 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 Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Dometic Group.
Diversification Opportunities for Lindab International and Dometic Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lindab and Dometic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Dometic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dometic 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 Dometic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dometic Group AB has no effect on the direction of Lindab International i.e., Lindab International and Dometic Group go up and down completely randomly.
Pair Corralation between Lindab International and Dometic Group
Assuming the 90 days trading horizon Lindab International AB is expected to generate 1.02 times more return on investment than Dometic Group. However, Lindab International is 1.02 times more volatile than Dometic Group AB. It trades about 0.04 of its potential returns per unit of risk. Dometic Group AB is currently generating about -0.11 per unit of risk. If you would invest 20,765 in Lindab International AB on September 3, 2024 and sell it today you would earn a total of 1,995 from holding Lindab International AB or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindab International AB vs. Dometic Group AB
Performance |
| Timeline |
| Lindab International |
| Dometic Group AB |
Lindab International and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and Dometic Group
The main advantage of trading using opposite Lindab International and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, Dometic 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 Dometic Group will offset losses from the drop in Dometic Group's long position.| Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab AB |
| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |