Correlation Between EQT AB and Fagerhult
Can any of the company-specific risk be diversified away by investing in both EQT AB and Fagerhult 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 EQT AB and Fagerhult into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT AB and Fagerhult AB, you can compare the effects of market volatilities on EQT AB and Fagerhult 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 EQT AB with a short position of Fagerhult. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT AB and Fagerhult.
Diversification Opportunities for EQT AB and Fagerhult
Excellent diversification
The 3 months correlation between EQT and Fagerhult is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Fagerhult AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fagerhult AB and EQT 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 EQT AB are associated (or correlated) with Fagerhult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fagerhult AB has no effect on the direction of EQT AB i.e., EQT AB and Fagerhult go up and down completely randomly.
Pair Corralation between EQT AB and Fagerhult
Assuming the 90 days trading horizon EQT AB is expected to generate 0.7 times more return on investment than Fagerhult. However, EQT AB is 1.44 times less risky than Fagerhult. It trades about -0.1 of its potential returns per unit of risk. Fagerhult AB is currently generating about -0.27 per unit of risk. If you would invest 35,260 in EQT AB on November 29, 2024 and sell it today you would lose (1,150) from holding EQT AB or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EQT AB vs. Fagerhult AB
Performance |
| Timeline |
| EQT AB |
| Fagerhult AB |
EQT AB and Fagerhult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQT AB and Fagerhult
The main advantage of trading using opposite EQT AB and Fagerhult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT AB position performs unexpectedly, Fagerhult 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 Fagerhult will offset losses from the drop in Fagerhult's long position.| EQT AB vs. Investor AB ser | EQT AB vs. Kinnevik Investment AB | EQT AB vs. Samhllsbyggnadsbolaget i Norden | EQT AB vs. Investment AB Latour |
| Fagerhult vs. Inwido AB | Fagerhult vs. Beijer Alma AB | Fagerhult vs. New Wave Group | Fagerhult vs. Duni 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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