Correlation Between Fabege AB and FastPartner
Can any of the company-specific risk be diversified away by investing in both Fabege AB and FastPartner 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 FastPartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabege AB and FastPartner AB, you can compare the effects of market volatilities on Fabege AB and FastPartner 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 FastPartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabege AB and FastPartner.
Diversification Opportunities for Fabege AB and FastPartner
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fabege and FastPartner is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fabege AB and FastPartner AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FastPartner 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 FastPartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FastPartner AB has no effect on the direction of Fabege AB i.e., Fabege AB and FastPartner go up and down completely randomly.
Pair Corralation between Fabege AB and FastPartner
Assuming the 90 days trading horizon Fabege AB is expected to under-perform the FastPartner. But the stock apears to be less risky and, when comparing its historical volatility, Fabege AB is 1.16 times less risky than FastPartner. The stock trades about -0.03 of its potential returns per unit of risk. The FastPartner AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,270 in FastPartner AB on September 3, 2024 and sell it today you would lose (330.00) from holding FastPartner AB or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabege AB vs. FastPartner AB
Performance |
| Timeline |
| Fabege AB |
| FastPartner AB |
Fabege AB and FastPartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabege AB and FastPartner
The main advantage of trading using opposite Fabege AB and FastPartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabege AB position performs unexpectedly, FastPartner 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 FastPartner will offset losses from the drop in FastPartner'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 |
| FastPartner vs. Atrium Ljungberg AB | FastPartner vs. Platzer Fastigheter Holding | FastPartner vs. Nyfosa AB | FastPartner vs. Fabege 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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