Correlation Between Lindab International and Munters Group
Can any of the company-specific risk be diversified away by investing in both Lindab International and Munters 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 Munters 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 Munters Group AB, you can compare the effects of market volatilities on Lindab International and Munters 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 Munters Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Munters Group.
Diversification Opportunities for Lindab International and Munters Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lindab and Munters is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Munters Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munters 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 Munters Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munters Group AB has no effect on the direction of Lindab International i.e., Lindab International and Munters Group go up and down completely randomly.
Pair Corralation between Lindab International and Munters Group
Assuming the 90 days trading horizon Lindab International AB is expected to generate 0.58 times more return on investment than Munters Group. However, Lindab International AB is 1.72 times less risky than Munters Group. It trades about 0.06 of its potential returns per unit of risk. Munters Group AB is currently generating about 0.03 per unit of risk. If you would invest 22,320 in Lindab International AB on September 1, 2024 and sell it today you would earn a total of 440.00 from holding Lindab International AB or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lindab International AB vs. Munters Group AB
Performance |
| Timeline |
| Lindab International |
| Munters Group AB |
Lindab International and Munters Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindab International and Munters Group
The main advantage of trading using opposite Lindab International and Munters Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, Munters 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 Munters Group will offset losses from the drop in Munters Group's long position.| Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab AB |
| Munters Group vs. Lindab International AB | Munters Group vs. Nolato AB | Munters Group vs. Trelleborg AB | Munters Group vs. BillerudKorsnas 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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