Correlation Between Fastighets and ALM Equity
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By analyzing existing cross correlation between Fastighets AB Balder and ALM Equity AB, you can compare the effects of market volatilities on Fastighets and ALM Equity 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 Fastighets with a short position of ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and ALM Equity.
Diversification Opportunities for Fastighets and ALM Equity
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fastighets and ALM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and Fastighets 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 Fastighets AB Balder are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of Fastighets i.e., Fastighets and ALM Equity go up and down completely randomly.
Pair Corralation between Fastighets and ALM Equity
Assuming the 90 days trading horizon Fastighets AB Balder is expected to generate 2.12 times more return on investment than ALM Equity. However, Fastighets is 2.12 times more volatile than ALM Equity AB. It trades about 0.08 of its potential returns per unit of risk. ALM Equity AB is currently generating about 0.12 per unit of risk. If you would invest 6,584 in Fastighets AB Balder on September 1, 2024 and sell it today you would earn a total of 1,808 from holding Fastighets AB Balder or generate 27.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fastighets AB Balder vs. ALM Equity AB
Performance |
| Timeline |
| Fastighets AB Balder |
| ALM Equity AB |
Fastighets and ALM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fastighets and ALM Equity
The main advantage of trading using opposite Fastighets and ALM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets position performs unexpectedly, ALM Equity 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 ALM Equity will offset losses from the drop in ALM Equity's long position.| Fastighets vs. Castellum AB | Fastighets vs. Fabege AB | Fastighets vs. AB Sagax | Fastighets vs. Wallenstam AB |
| ALM Equity vs. Neola Medical AB | ALM Equity vs. Upsales Technology AB | ALM Equity vs. Kinnevik Investment AB | ALM Equity vs. MTI Investment SE |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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