Correlation Between Castellum and NP3 Fastigheter
Can any of the company-specific risk be diversified away by investing in both Castellum 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 Castellum and NP3 Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castellum AB and NP3 Fastigheter AB, you can compare the effects of market volatilities on Castellum 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 Castellum with a short position of NP3 Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and NP3 Fastigheter.
Diversification Opportunities for Castellum and NP3 Fastigheter
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Castellum and NP3 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Castellum 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 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 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 Castellum i.e., Castellum and NP3 Fastigheter go up and down completely randomly.
Pair Corralation between Castellum and NP3 Fastigheter
Assuming the 90 days trading horizon Castellum is expected to generate 1.43 times less return on investment than NP3 Fastigheter. In addition to that, Castellum is 1.03 times more volatile than NP3 Fastigheter AB. It trades about 0.03 of its total potential returns per unit of risk. NP3 Fastigheter AB is currently generating about 0.04 per unit of volatility. If you would invest 19,028 in NP3 Fastigheter AB on September 2, 2024 and sell it today you would earn a total of 6,722 from holding NP3 Fastigheter AB or generate 35.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castellum AB vs. NP3 Fastigheter AB
Performance |
| Timeline |
| Castellum AB |
| NP3 Fastigheter AB |
Castellum and NP3 Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellum and NP3 Fastigheter
The main advantage of trading using opposite Castellum and NP3 Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum 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.The idea behind Castellum AB and NP3 Fastigheter AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NP3 Fastigheter vs. Fastighets AB Balder | NP3 Fastigheter vs. Wallenstam AB | NP3 Fastigheter vs. Hufvudstaden 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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