Correlation Between NIBE Industrier and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and Invisio Communications 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 Invisio Communications 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 Invisio Communications AB, you can compare the effects of market volatilities on NIBE Industrier and Invisio Communications 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 Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Invisio Communications.
Diversification Opportunities for NIBE Industrier and Invisio Communications
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIBE and Invisio is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications 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 Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and Invisio Communications go up and down completely randomly.
Pair Corralation between NIBE Industrier and Invisio Communications
Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the Invisio Communications. In addition to that, NIBE Industrier is 1.4 times more volatile than Invisio Communications AB. It trades about -0.16 of its total potential returns per unit of risk. Invisio Communications AB is currently generating about 0.37 per unit of volatility. If you would invest 32,400 in Invisio Communications AB on November 27, 2024 and sell it today you would earn a total of 5,450 from holding Invisio Communications AB or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. Invisio Communications AB
Performance |
| Timeline |
| NIBE Industrier AB |
| Invisio Communications |
NIBE Industrier and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and Invisio Communications
The main advantage of trading using opposite NIBE Industrier and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' 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 |
| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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