Correlation Between Belimo Holding and Forbo Holding

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

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

Diversification Opportunities for Belimo Holding and Forbo Holding

0.89

Correlation Coefficient

Belimo Holding  Forbo Holding

Very poor diversification

The 3 months correlation between Belimo and Forbo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Belimo Holding and Forbo Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forbo Holding AG and Belimo Holding 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 Belimo Holding are associated (or correlated) with Forbo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forbo Holding AG has no effect on the direction of Belimo Holding i.e., Belimo Holding and Forbo Holding go up and down completely randomly.

Pair Corralation between Belimo Holding and Forbo Holding

Assuming the 90 days trading horizon Belimo Holding is expected to generate 1.11 times more return on investment than Forbo Holding. However, Belimo Holding is 1.11 times more volatile than Forbo Holding AG. It trades about 0.38 of its potential returns per unit of risk. Forbo Holding AG is currently generating about 0.15 per unit of risk. If you would invest  55,250  in Belimo Holding on April 23, 2025 and sell it today you would earn a total of  34,800  from holding Belimo Holding or generate 62.99% return on investment over 90 days.

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

Belimo Holding  vs.  Forbo Holding AG

Belimo Holding

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Belimo Holding are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Belimo Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Forbo Holding AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Forbo Holding AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Forbo Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Belimo Holding and Forbo Holding

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

The idea behind Belimo Holding and Forbo Holding AG 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.