Correlation Between Castellum and Nyfosa AB
Can any of the company-specific risk be diversified away by investing in both Castellum and Nyfosa 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 Nyfosa 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 Nyfosa AB, you can compare the effects of market volatilities on Castellum and Nyfosa 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 Nyfosa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and Nyfosa AB.
Diversification Opportunities for Castellum and Nyfosa AB
Poor diversification
The 3 months correlation between Castellum and Nyfosa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and Nyfosa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyfosa 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 Nyfosa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyfosa AB has no effect on the direction of Castellum i.e., Castellum and Nyfosa AB go up and down completely randomly.
Pair Corralation between Castellum and Nyfosa AB
Assuming the 90 days trading horizon Castellum is expected to generate 8.85 times less return on investment than Nyfosa AB. But when comparing it to its historical volatility, Castellum AB is 1.48 times less risky than Nyfosa AB. It trades about 0.03 of its potential returns per unit of risk. Nyfosa AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,690 in Nyfosa AB on November 2, 2024 and sell it today you would earn a total of 810.00 from holding Nyfosa AB or generate 7.58% 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. Nyfosa AB
Performance |
| Timeline |
| Castellum AB |
| Nyfosa AB |
Castellum and Nyfosa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellum and Nyfosa AB
The main advantage of trading using opposite Castellum and Nyfosa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum position performs unexpectedly, Nyfosa 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 Nyfosa AB will offset losses from the drop in Nyfosa AB's long position.| Castellum vs. Fabege AB | Castellum vs. Samhllsbyggnadsbolaget i Norden | Castellum vs. Fastighets AB Balder | Castellum vs. Axfood AB |
| Nyfosa AB vs. AstraZeneca PLC | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Atlas Copco 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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