Correlation Between Cemat AS and Fast Ejendom
Can any of the company-specific risk be diversified away by investing in both Cemat AS and Fast Ejendom 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 Cemat AS and Fast Ejendom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cemat AS and Fast Ejendom, you can compare the effects of market volatilities on Cemat AS and Fast Ejendom 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 Cemat AS with a short position of Fast Ejendom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemat AS and Fast Ejendom.
Diversification Opportunities for Cemat AS and Fast Ejendom
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cemat and Fast is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cemat AS and Fast Ejendom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Ejendom and Cemat AS 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 Cemat AS are associated (or correlated) with Fast Ejendom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Ejendom has no effect on the direction of Cemat AS i.e., Cemat AS and Fast Ejendom go up and down completely randomly.
Pair Corralation between Cemat AS and Fast Ejendom
Assuming the 90 days trading horizon Cemat AS is expected to under-perform the Fast Ejendom. In addition to that, Cemat AS is 1.04 times more volatile than Fast Ejendom. It trades about -0.2 of its total potential returns per unit of risk. Fast Ejendom is currently generating about -0.11 per unit of volatility. If you would invest 12,000 in Fast Ejendom on August 28, 2024 and sell it today you would lose (300.00) from holding Fast Ejendom or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cemat AS vs. Fast Ejendom
Performance |
| Timeline |
| Cemat AS |
| Fast Ejendom |
Cemat AS and Fast Ejendom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemat AS and Fast Ejendom
The main advantage of trading using opposite Cemat AS and Fast Ejendom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemat AS position performs unexpectedly, Fast Ejendom 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 Fast Ejendom will offset losses from the drop in Fast Ejendom's long position.| Cemat AS vs. BioPorto | Cemat AS vs. Newcap Holding AS | Cemat AS vs. Agat Ejendomme AS | Cemat AS vs. PF Atlantic Petroleum |
| Fast Ejendom vs. Jeudan | Fast Ejendom vs. Copenhagen Capital AS | Fast Ejendom vs. Cemat AS | Fast Ejendom vs. Movinn AS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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