Correlation Between Castellum and SBB-B
Can any of the company-specific risk be diversified away by investing in both Castellum and SBB-B 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 SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castellum AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Castellum and SBB-B 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 SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and SBB-B.
Diversification Opportunities for Castellum and SBB-B
Almost no diversification
The 3 months correlation between Castellum and SBB-B is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget 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 SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Castellum i.e., Castellum and SBB-B go up and down completely randomly.
Pair Corralation between Castellum and SBB-B
Assuming the 90 days trading horizon Castellum AB is expected to generate 0.34 times more return on investment than SBB-B. However, Castellum AB is 2.98 times less risky than SBB-B. It trades about -0.12 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.13 per unit of risk. If you would invest 14,185 in Castellum AB on August 28, 2024 and sell it today you would lose (1,605) from holding Castellum AB or give up 11.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castellum AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Castellum AB |
| Samhllsbyggnadsbolaget |
Castellum and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellum and SBB-B
The main advantage of trading using opposite Castellum and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Castellum vs. Fabege AB | Castellum vs. Samhllsbyggnadsbolaget i Norden | Castellum vs. Fastighets AB Balder | Castellum vs. Axfood 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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