Correlation Between NIBE Industrier and Husqvarna
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and Husqvarna 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 Husqvarna 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 Husqvarna AB, you can compare the effects of market volatilities on NIBE Industrier and Husqvarna 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 Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Husqvarna.
Diversification Opportunities for NIBE Industrier and Husqvarna
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NIBE and Husqvarna is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna 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 Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and Husqvarna go up and down completely randomly.
Pair Corralation between NIBE Industrier and Husqvarna
Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the Husqvarna. In addition to that, NIBE Industrier is 1.3 times more volatile than Husqvarna AB. It trades about -0.16 of its total potential returns per unit of risk. Husqvarna AB is currently generating about -0.13 per unit of volatility. If you would invest 5,958 in Husqvarna AB on November 27, 2024 and sell it today you would lose (370.00) from holding Husqvarna AB or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. Husqvarna AB
Performance |
| Timeline |
| NIBE Industrier AB |
| Husqvarna AB |
NIBE Industrier and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and Husqvarna
The main advantage of trading using opposite NIBE Industrier and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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