Correlation Between Fabege AB and Nyfosa AB
Can any of the company-specific risk be diversified away by investing in both Fabege AB and Nyfosa AB 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 Nyfosa AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabege AB and Nyfosa AB, you can compare the effects of market volatilities on Fabege AB and Nyfosa AB 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 Nyfosa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabege AB and Nyfosa AB.
Diversification Opportunities for Fabege AB and Nyfosa AB
Very poor diversification
The 3 months correlation between Fabege and Nyfosa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fabege AB and Nyfosa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyfosa 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 Nyfosa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyfosa AB has no effect on the direction of Fabege AB i.e., Fabege AB and Nyfosa AB go up and down completely randomly.
Pair Corralation between Fabege AB and Nyfosa AB
Assuming the 90 days trading horizon Fabege AB is expected to under-perform the Nyfosa AB. But the stock apears to be less risky and, when comparing its historical volatility, Fabege AB is 1.19 times less risky than Nyfosa AB. The stock trades about -0.02 of its potential returns per unit of risk. The Nyfosa AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,961 in Nyfosa AB on September 2, 2024 and sell it today you would earn a total of 2,939 from holding Nyfosa AB or generate 36.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabege AB vs. Nyfosa AB
Performance |
| Timeline |
| Fabege AB |
| Nyfosa AB |
Fabege AB and Nyfosa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabege AB and Nyfosa AB
The main advantage of trading using opposite Fabege AB and Nyfosa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabege AB position performs unexpectedly, Nyfosa AB 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 Nyfosa AB will offset losses from the drop in Nyfosa AB's long position.The idea behind Fabege AB and Nyfosa AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nyfosa AB vs. AstraZeneca PLC | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Atlas Copco 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |