Correlation Between NIBE Industrier and Thule Group
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and Thule 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 Thule 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 Thule Group AB, you can compare the effects of market volatilities on NIBE Industrier and Thule 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 Thule Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Thule Group.
Diversification Opportunities for NIBE Industrier and Thule Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NIBE and Thule is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule 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 Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and Thule Group go up and down completely randomly.
Pair Corralation between NIBE Industrier and Thule Group
Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the Thule Group. But the stock apears to be less risky and, when comparing its historical volatility, NIBE Industrier AB is 1.11 times less risky than Thule Group. The stock trades about -0.07 of its potential returns per unit of risk. The Thule Group AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 28,746 in Thule Group AB on August 25, 2024 and sell it today you would earn a total of 6,334 from holding Thule Group AB or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIBE Industrier AB vs. Thule Group AB
Performance |
| Timeline |
| NIBE Industrier AB |
| Thule Group AB |
NIBE Industrier and Thule Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and Thule Group
The main advantage of trading using opposite NIBE Industrier and Thule Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, Thule 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 Thule Group will offset losses from the drop in Thule 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 |
| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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