Correlation Between Nordic Waterproofing and PolyPlank Publ
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and PolyPlank Publ 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 PolyPlank Publ 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 PolyPlank publ AB, you can compare the effects of market volatilities on Nordic Waterproofing and PolyPlank Publ 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 PolyPlank Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and PolyPlank Publ.
Diversification Opportunities for Nordic Waterproofing and PolyPlank Publ
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and PolyPlank is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and PolyPlank publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPlank publ 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 PolyPlank Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPlank publ AB has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and PolyPlank Publ go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and PolyPlank Publ
Assuming the 90 days trading horizon Nordic Waterproofing Holding is expected to under-perform the PolyPlank Publ. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Waterproofing Holding is 3.0 times less risky than PolyPlank Publ. The stock trades about -0.17 of its potential returns per unit of risk. The PolyPlank publ AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 3.10 in PolyPlank publ AB on September 1, 2024 and sell it today you would lose (0.20) from holding PolyPlank publ AB or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. PolyPlank publ AB
Performance |
| Timeline |
| Nordic Waterproofing |
| PolyPlank publ AB |
Nordic Waterproofing and PolyPlank Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and PolyPlank Publ
The main advantage of trading using opposite Nordic Waterproofing and PolyPlank Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, PolyPlank Publ 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 PolyPlank Publ will offset losses from the drop in PolyPlank Publ'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 |
| PolyPlank Publ vs. Saxlund Group AB | PolyPlank Publ vs. Online Brands Nordic | PolyPlank Publ vs. Organoclick AB | PolyPlank Publ vs. Minesto 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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