Correlation Between Nolato AB and Lindab International
Can any of the company-specific risk be diversified away by investing in both Nolato AB and Lindab International 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 Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and Lindab International AB, you can compare the effects of market volatilities on Nolato AB and Lindab International 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 Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and Lindab International.
Diversification Opportunities for Nolato AB and Lindab International
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nolato and Lindab is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nolato AB and Lindab International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindab International 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 Lindab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindab International has no effect on the direction of Nolato AB i.e., Nolato AB and Lindab International go up and down completely randomly.
Pair Corralation between Nolato AB and Lindab International
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.23 times less return on investment than Lindab International. But when comparing it to its historical volatility, Nolato AB is 1.25 times less risky than Lindab International. It trades about 0.03 of its potential returns per unit of risk. Lindab International AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 23,023 in Lindab International AB on August 25, 2024 and sell it today you would earn a total of 277.00 from holding Lindab International AB or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. Lindab International AB
Performance |
| Timeline |
| Nolato AB |
| Lindab International |
Nolato AB and Lindab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and Lindab International
The main advantage of trading using opposite Nolato AB and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB position performs unexpectedly, Lindab International 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 Lindab International will offset losses from the drop in Lindab International's long position.| Nolato AB vs. New Wave Group | Nolato AB vs. Cantargia AB | Nolato AB vs. Enea AB | Nolato AB vs. Proact IT Group |
| Lindab International vs. Addtech AB | Lindab International vs. Teqnion AB | Lindab International vs. Vitec Software Group | Lindab International vs. Lagercrantz Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |