Correlation Between Nordic Waterproofing and Bufab Holding
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and Bufab Holding 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 Bufab Holding 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 Bufab Holding AB, you can compare the effects of market volatilities on Nordic Waterproofing and Bufab Holding 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 Bufab Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and Bufab Holding.
Diversification Opportunities for Nordic Waterproofing and Bufab Holding
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Bufab is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and Bufab Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bufab Holding AB 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 Bufab Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bufab Holding AB has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and Bufab Holding go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and Bufab Holding
Assuming the 90 days trading horizon Nordic Waterproofing is expected to generate 1.37 times less return on investment than Bufab Holding. In addition to that, Nordic Waterproofing is 1.43 times more volatile than Bufab Holding AB. It trades about 0.14 of its total potential returns per unit of risk. Bufab Holding AB is currently generating about 0.28 per unit of volatility. If you would invest 36,480 in Bufab Holding AB on August 24, 2024 and sell it today you would earn a total of 4,940 from holding Bufab Holding AB or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. Bufab Holding AB
Performance |
| Timeline |
| Nordic Waterproofing |
| Bufab Holding AB |
Nordic Waterproofing and Bufab Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and Bufab Holding
The main advantage of trading using opposite Nordic Waterproofing and Bufab Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, Bufab Holding 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 Bufab Holding will offset losses from the drop in Bufab Holding's long position.| Nordic Waterproofing vs. Bufab Holding AB | Nordic Waterproofing vs. Garo AB | Nordic Waterproofing vs. Inwido AB | Nordic Waterproofing vs. CTT Systems AB |
| Bufab Holding vs. Addtech AB | Bufab Holding vs. Indutrade AB | Bufab Holding vs. Troax Group AB | Bufab Holding vs. Beijer Ref 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |