Correlation Between Thule Group and BillerudKorsnas
Can any of the company-specific risk be diversified away by investing in both Thule Group and BillerudKorsnas 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 Thule Group and BillerudKorsnas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thule Group AB and BillerudKorsnas AB, you can compare the effects of market volatilities on Thule Group and BillerudKorsnas 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 Thule Group with a short position of BillerudKorsnas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thule Group and BillerudKorsnas.
Diversification Opportunities for Thule Group and BillerudKorsnas
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thule and BillerudKorsnas is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Thule Group AB and BillerudKorsnas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BillerudKorsnas AB and Thule Group 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 Thule Group AB are associated (or correlated) with BillerudKorsnas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BillerudKorsnas AB has no effect on the direction of Thule Group i.e., Thule Group and BillerudKorsnas go up and down completely randomly.
Pair Corralation between Thule Group and BillerudKorsnas
Assuming the 90 days trading horizon Thule Group AB is expected to generate 1.11 times more return on investment than BillerudKorsnas. However, Thule Group is 1.11 times more volatile than BillerudKorsnas AB. It trades about 0.08 of its potential returns per unit of risk. BillerudKorsnas AB is currently generating about 0.07 per unit of risk. If you would invest 24,952 in Thule Group AB on November 3, 2024 and sell it today you would earn a total of 10,248 from holding Thule Group AB or generate 41.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thule Group AB vs. BillerudKorsnas AB
Performance |
| Timeline |
| Thule Group AB |
| BillerudKorsnas AB |
Thule Group and BillerudKorsnas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thule Group and BillerudKorsnas
The main advantage of trading using opposite Thule Group and BillerudKorsnas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thule Group position performs unexpectedly, BillerudKorsnas 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 BillerudKorsnas will offset losses from the drop in BillerudKorsnas' long position.| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna AB |
| BillerudKorsnas vs. Holmen AB | BillerudKorsnas vs. Svenska Cellulosa Aktiebolaget | BillerudKorsnas vs. Husqvarna AB | BillerudKorsnas vs. Alfa Laval 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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