Correlation Between NIBE Industrier and Carrier Global
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and Carrier Global 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 Carrier Global 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 Carrier Global Corp, you can compare the effects of market volatilities on NIBE Industrier and Carrier Global 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 Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Carrier Global.
Diversification Opportunities for NIBE Industrier and Carrier Global
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NIBE and Carrier is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Carrier Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global Corp 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 Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global Corp has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and Carrier Global go up and down completely randomly.
Pair Corralation between NIBE Industrier and Carrier Global
Assuming the 90 days horizon NIBE Industrier AB is expected to under-perform the Carrier Global. In addition to that, NIBE Industrier is 2.01 times more volatile than Carrier Global Corp. It trades about -0.05 of its total potential returns per unit of risk. Carrier Global Corp is currently generating about 0.09 per unit of volatility. If you would invest 4,194 in Carrier Global Corp on August 31, 2024 and sell it today you would earn a total of 3,496 from holding Carrier Global Corp or generate 83.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. Carrier Global Corp
Performance |
| Timeline |
| NIBE Industrier AB |
| Carrier Global Corp |
NIBE Industrier and Carrier Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and Carrier Global
The main advantage of trading using opposite NIBE Industrier and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, Carrier Global 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 Carrier Global will offset losses from the drop in Carrier Global's long position.| NIBE Industrier vs. Carrier Global Corp | NIBE Industrier vs. Johnson Controls International | NIBE Industrier vs. Lennox International | NIBE Industrier vs. Masco |
| Carrier Global vs. Johnson Controls International | Carrier Global vs. Lennox International | Carrier Global vs. Masco | Carrier Global vs. Carlisle Companies Incorporated |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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