Correlation Between Munters Group and Lindab International
Can any of the company-specific risk be diversified away by investing in both Munters Group and Lindab 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 Munters Group and Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Munters Group AB and Lindab International AB, you can compare the effects of market volatilities on Munters Group and Lindab 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 Munters Group with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munters Group and Lindab International.
Diversification Opportunities for Munters Group and Lindab International
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Munters and Lindab is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Munters Group AB and Lindab International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindab International and Munters Group 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 Munters Group AB are associated (or correlated) with Lindab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindab International has no effect on the direction of Munters Group i.e., Munters Group and Lindab International go up and down completely randomly.
Pair Corralation between Munters Group and Lindab International
Assuming the 90 days trading horizon Munters Group AB is expected to under-perform the Lindab International. In addition to that, Munters Group is 1.9 times more volatile than Lindab International AB. It trades about -0.12 of its total potential returns per unit of risk. Lindab International AB is currently generating about 0.07 per unit of volatility. If you would invest 22,885 in Lindab International AB on August 29, 2024 and sell it today you would earn a total of 555.00 from holding Lindab International AB or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Munters Group AB vs. Lindab International AB
Performance |
| Timeline |
| Munters Group AB |
| Lindab International |
Munters Group and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Munters Group and Lindab International
The main advantage of trading using opposite Munters Group and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munters Group position performs unexpectedly, Lindab 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 Lindab International will offset losses from the drop in Lindab International's long position.| Munters Group vs. Lindab International AB | Munters Group vs. Nolato AB | Munters Group vs. Trelleborg AB | Munters Group vs. BillerudKorsnas AB |
| Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab 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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