Correlation Between Fabege AB and Castellum
Can any of the company-specific risk be diversified away by investing in both Fabege AB and Castellum 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 Fabege AB and Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabege AB and Castellum AB, you can compare the effects of market volatilities on Fabege AB and Castellum 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 Fabege AB with a short position of Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabege AB and Castellum.
Diversification Opportunities for Fabege AB and Castellum
Almost no diversification
The 3 months correlation between Fabege and Castellum is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fabege AB and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB and Fabege 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 Fabege AB are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of Fabege AB i.e., Fabege AB and Castellum go up and down completely randomly.
Pair Corralation between Fabege AB and Castellum
Assuming the 90 days trading horizon Fabege AB is expected to generate 2.69 times less return on investment than Castellum. But when comparing it to its historical volatility, Fabege AB is 1.12 times less risky than Castellum. It trades about 0.01 of its potential returns per unit of risk. Castellum AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,102 in Castellum AB on August 25, 2024 and sell it today you would earn a total of 1,403 from holding Castellum AB or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabege AB vs. Castellum AB
Performance |
| Timeline |
| Fabege AB |
| Castellum AB |
Fabege AB and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabege AB and Castellum
The main advantage of trading using opposite Fabege AB and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabege AB position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.| Fabege AB vs. Castellum AB | Fabege AB vs. Fastighets AB Balder | Fabege AB vs. Wihlborgs Fastigheter AB | Fabege AB vs. Hufvudstaden AB |
| Castellum vs. Fastighets AB Balder | Castellum vs. Fabege AB | Castellum vs. Wihlborgs Fastigheter AB | Castellum vs. AB Sagax |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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