Correlation Between Fabege AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Fabege AB and SBB-B 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 SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabege AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Fabege AB and SBB-B 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 SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabege AB and SBB-B.
Diversification Opportunities for Fabege AB and SBB-B
Almost no diversification
The 3 months correlation between Fabege and SBB-B is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fabege AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget 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 SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Fabege AB i.e., Fabege AB and SBB-B go up and down completely randomly.
Pair Corralation between Fabege AB and SBB-B
Assuming the 90 days trading horizon Fabege AB is expected to generate 0.3 times more return on investment than SBB-B. However, Fabege AB is 3.32 times less risky than SBB-B. It trades about -0.2 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.29 per unit of risk. If you would invest 8,720 in Fabege AB on August 24, 2024 and sell it today you would lose (610.00) from holding Fabege AB or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabege AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Fabege AB |
| Samhllsbyggnadsbolaget |
Fabege AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabege AB and SBB-B
The main advantage of trading using opposite Fabege AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabege AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B'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 |
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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