Correlation Between FastPartner and Dios Fastigheter
Can any of the company-specific risk be diversified away by investing in both FastPartner and Dios Fastigheter 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 FastPartner and Dios Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FastPartner AB and Dios Fastigheter AB, you can compare the effects of market volatilities on FastPartner and Dios Fastigheter 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 FastPartner with a short position of Dios Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of FastPartner and Dios Fastigheter.
Diversification Opportunities for FastPartner and Dios Fastigheter
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FastPartner and Dios is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FastPartner AB and Dios Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dios Fastigheter and FastPartner 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 FastPartner AB are associated (or correlated) with Dios Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dios Fastigheter has no effect on the direction of FastPartner i.e., FastPartner and Dios Fastigheter go up and down completely randomly.
Pair Corralation between FastPartner and Dios Fastigheter
Assuming the 90 days trading horizon FastPartner AB is expected to under-perform the Dios Fastigheter. In addition to that, FastPartner is 1.01 times more volatile than Dios Fastigheter AB. It trades about -0.24 of its total potential returns per unit of risk. Dios Fastigheter AB is currently generating about -0.13 per unit of volatility. If you would invest 8,135 in Dios Fastigheter AB on August 28, 2024 and sell it today you would lose (350.00) from holding Dios Fastigheter AB or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FastPartner AB vs. Dios Fastigheter AB
Performance |
| Timeline |
| FastPartner AB |
| Dios Fastigheter |
FastPartner and Dios Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FastPartner and Dios Fastigheter
The main advantage of trading using opposite FastPartner and Dios Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FastPartner position performs unexpectedly, Dios Fastigheter 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 Dios Fastigheter will offset losses from the drop in Dios Fastigheter's long position.| FastPartner vs. Atrium Ljungberg AB | FastPartner vs. Platzer Fastigheter Holding | FastPartner vs. Nyfosa AB | FastPartner vs. Fastighets AB Balder |
| Dios Fastigheter vs. Wihlborgs Fastigheter AB | Dios Fastigheter vs. Castellum AB | Dios Fastigheter vs. Fastighets AB Balder |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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