Correlation Between NIBE Industrier and Lindab International

Can any of the company-specific risk be diversified away by investing in both NIBE Industrier and Lindab International 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 NIBE Industrier and Lindab International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NIBE Industrier AB and Lindab International AB, you can compare the effects of market volatilities on NIBE Industrier and Lindab International 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 NIBE Industrier with a short position of Lindab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIBE Industrier and Lindab International.

Diversification Opportunities for NIBE Industrier and Lindab International

0.38

Correlation Coefficient

NIBE Industrier  Lindab International

Weak diversification

The 3 months correlation between NIBE and Lindab is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Lindab International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindab International and NIBE Industrier 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 NIBE Industrier AB are associated (or correlated) with Lindab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindab International has no effect on the direction of NIBE Industrier i.e., NIBE Industrier and Lindab International go up and down completely randomly.

Pair Corralation between NIBE Industrier and Lindab International

Assuming the 90 days trading horizon NIBE Industrier AB is expected to under-perform the Lindab International. But the stock apears to be less risky and, when comparing its historical volatility, NIBE Industrier AB is 1.01 times less risky than Lindab International. The stock trades about -0.13 of its potential returns per unit of risk. The Lindab International AB is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  26,126  in Lindab International AB on September 23, 2024 and sell it today you would lose (3,426) from holding Lindab International AB or give up 13.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NIBE Industrier AB  vs.  Lindab International AB

NIBE Industrier AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NIBE Industrier AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Lindab International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lindab International AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NIBE Industrier and Lindab International

The main advantage of trading using opposite NIBE Industrier and Lindab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier position performs unexpectedly, Lindab International 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 Lindab International will offset losses from the drop in Lindab International's long position.

The idea behind NIBE Industrier AB and Lindab International AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.