Correlation Between Catella AB and NP3 Fastigheter
Can any of the company-specific risk be diversified away by investing in both Catella AB 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 Catella AB and NP3 Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catella AB and NP3 Fastigheter AB, you can compare the effects of market volatilities on Catella AB 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 Catella AB with a short position of NP3 Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and NP3 Fastigheter.
Diversification Opportunities for Catella AB and NP3 Fastigheter
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catella and NP3 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Catella 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 Catella AB 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 Catella 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 Catella AB i.e., Catella AB and NP3 Fastigheter go up and down completely randomly.
Pair Corralation between Catella AB and NP3 Fastigheter
Assuming the 90 days trading horizon Catella AB is expected to under-perform the NP3 Fastigheter. But the stock apears to be less risky and, when comparing its historical volatility, Catella AB is 1.14 times less risky than NP3 Fastigheter. The stock trades about -0.01 of its potential returns per unit of risk. The NP3 Fastigheter AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 24,951 in NP3 Fastigheter AB on September 5, 2024 and sell it today you would earn a total of 749.00 from holding NP3 Fastigheter AB or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.85% |
| Values | Daily Returns |
Catella AB vs. NP3 Fastigheter AB
Performance |
| Timeline |
| Catella AB |
| NP3 Fastigheter AB |
Catella AB and NP3 Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catella AB and NP3 Fastigheter
The main advantage of trading using opposite Catella AB and NP3 Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB 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.| Catella AB vs. Industrivarden AB ser | Catella AB vs. Svenska Handelsbanken AB | Catella AB vs. Investor AB ser |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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