Correlation Between Thule Group and Nobia AB
Can any of the company-specific risk be diversified away by investing in both Thule Group and Nobia 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 Thule Group and Nobia AB 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 Nobia AB, you can compare the effects of market volatilities on Thule Group and Nobia 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 Thule Group with a short position of Nobia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thule Group and Nobia AB.
Diversification Opportunities for Thule Group and Nobia AB
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thule and Nobia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thule Group AB and Nobia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobia 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 Nobia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobia AB has no effect on the direction of Thule Group i.e., Thule Group and Nobia AB go up and down completely randomly.
Pair Corralation between Thule Group and Nobia AB
Assuming the 90 days trading horizon Thule Group AB is expected to generate 0.43 times more return on investment than Nobia AB. However, Thule Group AB is 2.33 times less risky than Nobia AB. It trades about 0.06 of its potential returns per unit of risk. Nobia AB is currently generating about -0.03 per unit of risk. If you would invest 25,011 in Thule Group AB on September 1, 2024 and sell it today you would earn a total of 9,329 from holding Thule Group AB or generate 37.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Thule Group AB vs. Nobia AB
Performance |
| Timeline |
| Thule Group AB |
| Nobia AB |
Thule Group and Nobia AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thule Group and Nobia AB
The main advantage of trading using opposite Thule Group and Nobia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thule Group position performs unexpectedly, Nobia 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 Nobia AB will offset losses from the drop in Nobia AB's long position.| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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