Correlation Between Fastighets and NP3 Fastigheter
Can any of the company-specific risk be diversified away by investing in both Fastighets and NP3 Fastigheter 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 NP3 Fastigheter 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 NP3 Fastigheter AB, you can compare the effects of market volatilities on Fastighets and NP3 Fastigheter 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 NP3 Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and NP3 Fastigheter.
Diversification Opportunities for Fastighets and NP3 Fastigheter
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fastighets and NP3 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and NP3 Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NP3 Fastigheter 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 NP3 Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NP3 Fastigheter AB has no effect on the direction of Fastighets i.e., Fastighets and NP3 Fastigheter go up and down completely randomly.
Pair Corralation between Fastighets and NP3 Fastigheter
Assuming the 90 days trading horizon Fastighets AB Balder is expected to under-perform the NP3 Fastigheter. In addition to that, Fastighets is 1.03 times more volatile than NP3 Fastigheter AB. It trades about -0.06 of its total potential returns per unit of risk. NP3 Fastigheter AB is currently generating about -0.01 per unit of volatility. If you would invest 26,547 in NP3 Fastigheter AB on August 31, 2024 and sell it today you would lose (347.00) from holding NP3 Fastigheter AB or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Fastighets AB Balder vs. NP3 Fastigheter AB
Performance |
| Timeline |
| Fastighets AB Balder |
| NP3 Fastigheter AB |
Fastighets and NP3 Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fastighets and NP3 Fastigheter
The main advantage of trading using opposite Fastighets and NP3 Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets position performs unexpectedly, NP3 Fastigheter 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 NP3 Fastigheter will offset losses from the drop in NP3 Fastigheter's long position.| Fastighets vs. Fabege AB | Fastighets vs. Wihlborgs Fastigheter AB | Fastighets vs. Castellum AB | Fastighets vs. Nyfosa AB |
| NP3 Fastigheter vs. Fabege AB | NP3 Fastigheter vs. Castellum AB | NP3 Fastigheter vs. Fastighets AB Balder | NP3 Fastigheter vs. Wallenstam 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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