Correlation Between Nolato AB and BillerudKorsnas
Can any of the company-specific risk be diversified away by investing in both Nolato AB and BillerudKorsnas 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 Nolato AB and BillerudKorsnas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and BillerudKorsnas AB, you can compare the effects of market volatilities on Nolato AB and BillerudKorsnas 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 Nolato AB with a short position of BillerudKorsnas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and BillerudKorsnas.
Diversification Opportunities for Nolato AB and BillerudKorsnas
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nolato and BillerudKorsnas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nolato AB and BillerudKorsnas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BillerudKorsnas AB and Nolato AB 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 Nolato AB are associated (or correlated) with BillerudKorsnas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BillerudKorsnas AB has no effect on the direction of Nolato AB i.e., Nolato AB and BillerudKorsnas go up and down completely randomly.
Pair Corralation between Nolato AB and BillerudKorsnas
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.59 times more return on investment than BillerudKorsnas. However, Nolato AB is 1.59 times more volatile than BillerudKorsnas AB. It trades about 0.35 of its potential returns per unit of risk. BillerudKorsnas AB is currently generating about 0.33 per unit of risk. If you would invest 5,540 in Nolato AB on November 27, 2024 and sell it today you would earn a total of 775.00 from holding Nolato AB or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. BillerudKorsnas AB
Performance |
| Timeline |
| Nolato AB |
| BillerudKorsnas AB |
Nolato AB and BillerudKorsnas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and BillerudKorsnas
The main advantage of trading using opposite Nolato AB and BillerudKorsnas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB position performs unexpectedly, BillerudKorsnas 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 BillerudKorsnas will offset losses from the drop in BillerudKorsnas' long position.| Nolato AB vs. HEXPOL AB | Nolato AB vs. Trelleborg AB | Nolato AB vs. Indutrade AB | Nolato AB vs. Vitrolife AB |
| BillerudKorsnas vs. Holmen AB | BillerudKorsnas vs. Svenska Cellulosa Aktiebolaget | BillerudKorsnas vs. Husqvarna AB | BillerudKorsnas vs. Alfa Laval 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 Stocks Directory module to find actively traded stocks across global markets.
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