Correlation Between Nordic Waterproofing and Alimak Hek
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and Alimak Hek 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 Nordic Waterproofing and Alimak Hek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Waterproofing Holding and Alimak Hek Group, you can compare the effects of market volatilities on Nordic Waterproofing and Alimak Hek 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 Nordic Waterproofing with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and Alimak Hek.
Diversification Opportunities for Nordic Waterproofing and Alimak Hek
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Alimak is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and Nordic Waterproofing 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 Nordic Waterproofing Holding are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and Alimak Hek go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and Alimak Hek
Assuming the 90 days trading horizon Nordic Waterproofing is expected to generate 2.59 times less return on investment than Alimak Hek. But when comparing it to its historical volatility, Nordic Waterproofing Holding is 1.08 times less risky than Alimak Hek. It trades about 0.01 of its potential returns per unit of risk. Alimak Hek Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,420 in Alimak Hek Group on September 1, 2024 and sell it today you would earn a total of 520.00 from holding Alimak Hek Group or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. Alimak Hek Group
Performance |
| Timeline |
| Nordic Waterproofing |
| Alimak Hek Group |
Nordic Waterproofing and Alimak Hek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and Alimak Hek
The main advantage of trading using opposite Nordic Waterproofing and Alimak Hek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, Alimak Hek 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 Alimak Hek will offset losses from the drop in Alimak Hek's long position.| Nordic Waterproofing vs. Inwido AB | Nordic Waterproofing vs. Byggmax Group AB | Nordic Waterproofing vs. AQ Group AB | Nordic Waterproofing vs. Garo AB |
| Alimak Hek vs. Samhllsbyggnadsbolaget i Norden | Alimak Hek vs. Sinch AB | Alimak Hek vs. Embracer Group AB | Alimak Hek vs. Evolution 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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