Correlation Between Fastighets and FastPartner
Can any of the company-specific risk be diversified away by investing in both Fastighets and FastPartner 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 Fastighets and FastPartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fastighets AB Balder and FastPartner AB Series, you can compare the effects of market volatilities on Fastighets and FastPartner 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 FastPartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and FastPartner.
Diversification Opportunities for Fastighets and FastPartner
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fastighets and FastPartner is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and FastPartner AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FastPartner AB Series 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 FastPartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FastPartner AB Series has no effect on the direction of Fastighets i.e., Fastighets and FastPartner go up and down completely randomly.
Pair Corralation between Fastighets and FastPartner
Assuming the 90 days trading horizon Fastighets AB Balder is expected to generate 1.86 times more return on investment than FastPartner. However, Fastighets is 1.86 times more volatile than FastPartner AB Series. It trades about 0.08 of its potential returns per unit of risk. FastPartner AB Series is currently generating about 0.11 per unit of risk. If you would invest 4,609 in Fastighets AB Balder on September 12, 2024 and sell it today you would earn a total of 3,439 from holding Fastighets AB Balder or generate 74.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fastighets AB Balder vs. FastPartner AB Series
Performance |
| Timeline |
| Fastighets AB Balder |
| FastPartner AB Series |
Fastighets and FastPartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fastighets and FastPartner
The main advantage of trading using opposite Fastighets and FastPartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets position performs unexpectedly, FastPartner 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 FastPartner will offset losses from the drop in FastPartner's long position.| Fastighets vs. Castellum AB | Fastighets vs. Fabege AB | Fastighets vs. AB Sagax | Fastighets vs. Wallenstam AB |
| FastPartner vs. Fabege AB | FastPartner vs. Castellum AB | FastPartner vs. Wallenstam AB | FastPartner vs. Fastighets AB Balder |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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