Correlation Between Avanza Bank and Fastighetsbolaget
Can any of the company-specific risk be diversified away by investing in both Avanza Bank and Fastighetsbolaget 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 Avanza Bank and Fastighetsbolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanza Bank Holding and Fastighetsbolaget Emilshus AB, you can compare the effects of market volatilities on Avanza Bank and Fastighetsbolaget 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 Avanza Bank with a short position of Fastighetsbolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanza Bank and Fastighetsbolaget.
Diversification Opportunities for Avanza Bank and Fastighetsbolaget
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Avanza and Fastighetsbolaget is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Avanza Bank Holding and Fastighetsbolaget Emilshus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighetsbolaget and Avanza Bank 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 Avanza Bank Holding are associated (or correlated) with Fastighetsbolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighetsbolaget has no effect on the direction of Avanza Bank i.e., Avanza Bank and Fastighetsbolaget go up and down completely randomly.
Pair Corralation between Avanza Bank and Fastighetsbolaget
Assuming the 90 days trading horizon Avanza Bank is expected to generate 1.12 times less return on investment than Fastighetsbolaget. But when comparing it to its historical volatility, Avanza Bank Holding is 1.84 times less risky than Fastighetsbolaget. It trades about 0.25 of its potential returns per unit of risk. Fastighetsbolaget Emilshus AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,430 in Fastighetsbolaget Emilshus AB on September 5, 2024 and sell it today you would earn a total of 380.00 from holding Fastighetsbolaget Emilshus AB or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanza Bank Holding vs. Fastighetsbolaget Emilshus AB
Performance |
| Timeline |
| Avanza Bank Holding |
| Fastighetsbolaget |
Avanza Bank and Fastighetsbolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanza Bank and Fastighetsbolaget
The main advantage of trading using opposite Avanza Bank and Fastighetsbolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanza Bank position performs unexpectedly, Fastighetsbolaget 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 Fastighetsbolaget will offset losses from the drop in Fastighetsbolaget's long position.| Avanza Bank vs. Nordea Bank Abp | Avanza Bank vs. Swedbank AB | Avanza Bank vs. Arion banki hf | Avanza Bank vs. TF Bank AB |
| Fastighetsbolaget vs. Online Brands Nordic | Fastighetsbolaget vs. Viva Wine Group | Fastighetsbolaget vs. Neola Medical AB | Fastighetsbolaget vs. Invisio Communications AB |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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