Correlation Between BE Group and NP3 Fastigheter
Can any of the company-specific risk be diversified away by investing in both BE Group 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 BE Group and NP3 Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Group AB and NP3 Fastigheter AB, you can compare the effects of market volatilities on BE Group 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 BE Group with a short position of NP3 Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and NP3 Fastigheter.
Diversification Opportunities for BE Group and NP3 Fastigheter
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEGR and NP3 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB 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 BE Group 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 BE Group AB 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 BE Group i.e., BE Group and NP3 Fastigheter go up and down completely randomly.
Pair Corralation between BE Group and NP3 Fastigheter
Assuming the 90 days trading horizon BE Group AB is expected to under-perform the NP3 Fastigheter. But the stock apears to be less risky and, when comparing its historical volatility, BE Group AB is 1.64 times less risky than NP3 Fastigheter. The stock trades about -0.27 of its potential returns per unit of risk. The NP3 Fastigheter AB is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 25,799 in NP3 Fastigheter AB on August 28, 2024 and sell it today you would lose (749.00) from holding NP3 Fastigheter AB or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Group AB vs. NP3 Fastigheter AB
Performance |
| Timeline |
| BE Group AB |
| NP3 Fastigheter AB |
BE Group and NP3 Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and NP3 Fastigheter
The main advantage of trading using opposite BE Group and NP3 Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group 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.| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group AB |
| NP3 Fastigheter vs. Platzer Fastigheter Holding | NP3 Fastigheter vs. Catena AB | NP3 Fastigheter vs. AB Sagax | NP3 Fastigheter vs. Nyfosa 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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