Correlation Between Lindab International and Peab AB
Can any of the company-specific risk be diversified away by investing in both Lindab International and Peab 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 Lindab International and Peab AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindab International AB and Peab AB, you can compare the effects of market volatilities on Lindab International and Peab 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 Lindab International with a short position of Peab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindab International and Peab AB.
Diversification Opportunities for Lindab International and Peab AB
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lindab and Peab is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lindab International AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab AB and Lindab International 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 Lindab International AB are associated (or correlated) with Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of Lindab International i.e., Lindab International and Peab AB go up and down completely randomly.
Pair Corralation between Lindab International and Peab AB
Assuming the 90 days trading horizon Lindab International AB is expected to under-perform the Peab AB. In addition to that, Lindab International is 1.42 times more volatile than Peab AB. It trades about -0.08 of its total potential returns per unit of risk. Peab AB is currently generating about 0.0 per unit of volatility. If you would invest 7,920 in Peab AB on December 30, 2024 and sell it today you would lose (120.00) from holding Peab AB or give up 1.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lindab International AB vs. Peab AB
Performance |
Timeline |
Lindab International |
Peab AB |
Lindab International and Peab AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lindab International and Peab AB
The main advantage of trading using opposite Lindab International and Peab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindab International position performs unexpectedly, Peab 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 Peab AB will offset losses from the drop in Peab AB's long position.Lindab International vs. Inwido AB | Lindab International vs. Nolato AB | Lindab International vs. Trelleborg AB | Lindab International vs. Peab AB |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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