Correlation Between NIBE Industrier and XANO Industri
Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and XANO Industri 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 XANO Industri 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 XANO Industri AB, you can compare the effects of market volatilities on NIBE Industrier and XANO Industri 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 XANO Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and XANO Industri.
Diversification Opportunities for NIBE Industrier and XANO Industri
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NIBE and XANO is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and XANO Industri AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XANO Industri 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 XANO Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XANO Industri AB has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and XANO Industri go up and down completely randomly.
Pair Corralation between NIBE Industrier and XANO Industri
Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the XANO Industri. In addition to that, NIBE Industrier is 1.08 times more volatile than XANO Industri AB. It trades about -0.11 of its total potential returns per unit of risk. XANO Industri AB is currently generating about 0.28 per unit of volatility. If you would invest 5,200 in XANO Industri AB on November 29, 2024 and sell it today you would earn a total of 900.00 from holding XANO Industri AB or generate 17.31% 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. XANO Industri AB
Performance |
| Timeline |
| NIBE Industrier AB |
| XANO Industri AB |
NIBE Industrier and XANO Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIBE Industrier and XANO Industri
The main advantage of trading using opposite NIBE Industrier and XANO Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, XANO Industri 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 XANO Industri will offset losses from the drop in XANO Industri'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 |
| XANO Industri vs. Troax Group AB | XANO Industri vs. Lagercrantz Group AB | XANO Industri vs. AQ Group AB | XANO Industri vs. OEM International 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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