Correlation Between Nordic Waterproofing and Synsam AB
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and Synsam AB 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 Synsam AB 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 Synsam AB, you can compare the effects of market volatilities on Nordic Waterproofing and Synsam AB 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 Synsam AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and Synsam AB.
Diversification Opportunities for Nordic Waterproofing and Synsam AB
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Synsam is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and Synsam AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synsam 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 Synsam AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synsam AB has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and Synsam AB go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and Synsam AB
Assuming the 90 days trading horizon Nordic Waterproofing Holding is expected to generate 0.77 times more return on investment than Synsam AB. However, Nordic Waterproofing Holding is 1.3 times less risky than Synsam AB. It trades about 0.03 of its potential returns per unit of risk. Synsam AB is currently generating about 0.02 per unit of risk. If you would invest 14,058 in Nordic Waterproofing Holding on August 30, 2024 and sell it today you would earn a total of 3,182 from holding Nordic Waterproofing Holding or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. Synsam AB
Performance |
| Timeline |
| Nordic Waterproofing |
| Synsam AB |
Nordic Waterproofing and Synsam AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and Synsam AB
The main advantage of trading using opposite Nordic Waterproofing and Synsam AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, Synsam AB 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 Synsam AB will offset losses from the drop in Synsam AB'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 |
| Synsam AB vs. Mantex AB | Synsam AB vs. Genovis AB | Synsam AB vs. Vestum AB | Synsam AB vs. Karolinska Development 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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