Correlation Between Autoliv and Cibus Nordic

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

By analyzing existing cross correlation between Autoliv and Cibus Nordic Real, you can compare the effects of market volatilities on Autoliv and Cibus Nordic 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 Autoliv with a short position of Cibus Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Cibus Nordic.

Diversification Opportunities for Autoliv and Cibus Nordic

0.93

Correlation Coefficient

Autoliv  Cibus Nordic

Almost no diversification

The 3 months correlation between Autoliv and Cibus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Cibus Nordic Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibus Nordic Real and Autoliv 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 Autoliv are associated (or correlated) with Cibus Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibus Nordic Real has no effect on the direction of Autoliv i.e., Autoliv and Cibus Nordic go up and down completely randomly.

Pair Corralation between Autoliv and Cibus Nordic

Assuming the 90 days trading horizon Autoliv is expected to generate 1.26 times more return on investment than Cibus Nordic. However, Autoliv is 1.26 times more volatile than Cibus Nordic Real. It trades about 0.26 of its potential returns per unit of risk. Cibus Nordic Real is currently generating about 0.22 per unit of risk. If you would invest  87,196  in Autoliv on April 24, 2025 and sell it today you would earn a total of  21,604  from holding Autoliv or generate 24.78% return on investment over 90 days.

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

Autoliv  vs.  Cibus Nordic Real

Autoliv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autoliv are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Autoliv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cibus Nordic Real

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cibus Nordic Real are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cibus Nordic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autoliv and Cibus Nordic

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

The idea behind Autoliv and Cibus Nordic Real 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.