Correlation Between Cibus Nordic and Heimstaden

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

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

Diversification Opportunities for Cibus Nordic and Heimstaden

0.9

Correlation Coefficient

Cibus Nordic  Heimstaden

Almost no diversification

The 3 months correlation between Cibus and Heimstaden is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cibus Nordic Real and Heimstaden AB Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heimstaden AB Pfd and Cibus Nordic 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 Cibus Nordic Real are associated (or correlated) with Heimstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heimstaden AB Pfd has no effect on the direction of Cibus Nordic i.e., Cibus Nordic and Heimstaden go up and down completely randomly.

Pair Corralation between Cibus Nordic and Heimstaden

Assuming the 90 days trading horizon Cibus Nordic is expected to generate 1.98 times less return on investment than Heimstaden. But when comparing it to its historical volatility, Cibus Nordic Real is 1.57 times less risky than Heimstaden. It trades about 0.2 of its potential returns per unit of risk. Heimstaden AB Pfd is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,280  in Heimstaden AB Pfd on April 22, 2025 and sell it today you would earn a total of  382.00  from holding Heimstaden AB Pfd or generate 29.84% return on investment over 90 days.

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

Cibus Nordic Real  vs.  Heimstaden AB Pfd

Cibus Nordic Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cibus Nordic Real are ranked lower than 15 (%) 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.

Heimstaden AB Pfd

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Heimstaden AB Pfd are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Heimstaden reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cibus Nordic and Heimstaden

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

The idea behind Cibus Nordic Real and Heimstaden AB Pfd 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.