Correlation Between NIBE Industrier and Dometic Group
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier 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 NIBE Industrier and Dometic Group 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 Dometic Group AB, you can compare the effects of market volatilities on NIBE Industrier 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 NIBE Industrier with a short position of Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Dometic Group.
Diversification Opportunities for NIBE Industrier and Dometic Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIBE and Dometic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier 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 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 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 NIBE Industrier i.e., NIBE Industrier and Dometic Group go up and down completely randomly.
Pair Corralation between NIBE Industrier and Dometic Group
Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the Dometic Group. In addition to that, NIBE Industrier is 1.46 times more volatile than Dometic Group AB. It trades about -0.03 of its total potential returns per unit of risk. Dometic Group AB is currently generating about -0.04 per unit of volatility. If you would invest 7,073 in Dometic Group AB on September 1, 2024 and sell it today you would lose (1,548) from holding Dometic Group AB or give up 21.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. Dometic Group AB
Performance |
| Timeline |
| NIBE Industrier AB |
| Dometic Group AB |
NIBE Industrier and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and Dometic Group
The main advantage of trading using opposite NIBE Industrier and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier 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.| NIBE Industrier vs. Hexagon AB | NIBE Industrier vs. Investor AB ser | NIBE Industrier vs. Investment AB Latour | NIBE Industrier vs. ASSA ABLOY AB |
| Dometic Group vs. AB SKF | Dometic Group vs. Tele2 AB | Dometic Group vs. Sandvik AB | Dometic Group vs. Skanska 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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