Correlation Between Nordic Waterproofing and FM Mattsson
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and FM Mattsson 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 FM Mattsson 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 FM Mattsson Mora, you can compare the effects of market volatilities on Nordic Waterproofing and FM Mattsson 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 FM Mattsson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and FM Mattsson.
Diversification Opportunities for Nordic Waterproofing and FM Mattsson
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and FMM-B is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and FM Mattsson Mora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FM Mattsson Mora 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 FM Mattsson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FM Mattsson Mora has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and FM Mattsson go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and FM Mattsson
Assuming the 90 days trading horizon Nordic Waterproofing Holding is expected to generate 1.03 times more return on investment than FM Mattsson. However, Nordic Waterproofing is 1.03 times more volatile than FM Mattsson Mora. It trades about 0.05 of its potential returns per unit of risk. FM Mattsson Mora is currently generating about -0.02 per unit of risk. If you would invest 16,080 in Nordic Waterproofing Holding on October 26, 2024 and sell it today you would earn a total of 1,680 from holding Nordic Waterproofing Holding or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. FM Mattsson Mora
Performance |
| Timeline |
| Nordic Waterproofing |
| FM Mattsson Mora |
Nordic Waterproofing and FM Mattsson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and FM Mattsson
The main advantage of trading using opposite Nordic Waterproofing and FM Mattsson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, FM Mattsson 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 FM Mattsson will offset losses from the drop in FM Mattsson'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 |
| FM Mattsson vs. Nordic Waterproofing Holding | FM Mattsson vs. Bufab Holding AB | FM Mattsson vs. Garo AB | FM Mattsson vs. Inwido 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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