Correlation Between Castellum and AAK AB
Can any of the company-specific risk be diversified away by investing in both Castellum and AAK AB 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 Castellum and AAK AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castellum AB and AAK AB, you can compare the effects of market volatilities on Castellum and AAK AB 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 Castellum with a short position of AAK AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and AAK AB.
Diversification Opportunities for Castellum and AAK AB
Very poor diversification
The 3 months correlation between Castellum and AAK is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and AAK AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAK AB and Castellum 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 Castellum AB are associated (or correlated) with AAK AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAK AB has no effect on the direction of Castellum i.e., Castellum and AAK AB go up and down completely randomly.
Pair Corralation between Castellum and AAK AB
Assuming the 90 days trading horizon Castellum AB is expected to under-perform the AAK AB. In addition to that, Castellum is 1.16 times more volatile than AAK AB. It trades about -0.02 of its total potential returns per unit of risk. AAK AB is currently generating about -0.01 per unit of volatility. If you would invest 28,960 in AAK AB on August 25, 2024 and sell it today you would lose (740.00) from holding AAK AB or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castellum AB vs. AAK AB
Performance |
| Timeline |
| Castellum AB |
| AAK AB |
Castellum and AAK AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellum and AAK AB
The main advantage of trading using opposite Castellum and AAK AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum position performs unexpectedly, AAK AB 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 AAK AB will offset losses from the drop in AAK AB's long position.| Castellum vs. Fastighets AB Balder | Castellum vs. Fabege AB | Castellum vs. Wihlborgs Fastigheter AB | Castellum vs. AB Sagax |
| AAK AB vs. Castellum AB | AAK AB vs. Tele2 AB | AAK AB vs. Investor AB ser | AAK AB vs. Kinnevik Investment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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