Correlation Between NIBE Industrier and NIBE Industrier
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and NIBE Industrier 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 NIBE Industrier and NIBE Industrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIBE Industrier AB and NIBE Industrier AB, you can compare the effects of market volatilities on NIBE Industrier and NIBE Industrier 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 NIBE Industrier with a short position of NIBE Industrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and NIBE Industrier.
Diversification Opportunities for NIBE Industrier and NIBE Industrier
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NIBE and NIBE is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and NIBE Industrier AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIBE Industrier AB and NIBE Industrier 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 NIBE Industrier AB are associated (or correlated) with NIBE Industrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIBE Industrier AB has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and NIBE Industrier go up and down completely randomly.
Pair Corralation between NIBE Industrier and NIBE Industrier
Assuming the 90 days horizon NIBE Industrier AB is expected to generate 0.56 times more return on investment than NIBE Industrier. However, NIBE Industrier AB is 1.78 times less risky than NIBE Industrier. It trades about -0.2 of its potential returns per unit of risk. NIBE Industrier AB is currently generating about -0.16 per unit of risk. If you would invest 482.00 in NIBE Industrier AB on August 27, 2024 and sell it today you would lose (53.00) from holding NIBE Industrier AB or give up 11.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. NIBE Industrier AB
Performance |
| Timeline |
| NIBE Industrier AB |
| NIBE Industrier AB |
NIBE Industrier and NIBE Industrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and NIBE Industrier
The main advantage of trading using opposite NIBE Industrier and NIBE Industrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, NIBE Industrier 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 NIBE Industrier will offset losses from the drop in NIBE Industrier's long position.| NIBE Industrier vs. Trane Technologies plc | NIBE Industrier vs. Carrier Global Corp | NIBE Industrier vs. Johnson Controls International | NIBE Industrier vs. Lennox International |
| NIBE Industrier vs. Trane Technologies plc | NIBE Industrier vs. Carrier Global Corp | NIBE Industrier vs. Johnson Controls International | NIBE Industrier vs. Lennox International |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |