Correlation Between Hufvudstaden and HEBA Fastighets
Can any of the company-specific risk be diversified away by investing in both Hufvudstaden and HEBA Fastighets 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 Hufvudstaden and HEBA Fastighets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hufvudstaden AB and HEBA Fastighets AB, you can compare the effects of market volatilities on Hufvudstaden and HEBA Fastighets 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 Hufvudstaden with a short position of HEBA Fastighets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hufvudstaden and HEBA Fastighets.
Diversification Opportunities for Hufvudstaden and HEBA Fastighets
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hufvudstaden and HEBA is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hufvudstaden AB and HEBA Fastighets AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEBA Fastighets AB and Hufvudstaden 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 Hufvudstaden AB are associated (or correlated) with HEBA Fastighets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEBA Fastighets AB has no effect on the direction of Hufvudstaden i.e., Hufvudstaden and HEBA Fastighets go up and down completely randomly.
Pair Corralation between Hufvudstaden and HEBA Fastighets
Assuming the 90 days trading horizon Hufvudstaden AB is expected to under-perform the HEBA Fastighets. But the stock apears to be less risky and, when comparing its historical volatility, Hufvudstaden AB is 1.4 times less risky than HEBA Fastighets. The stock trades about -0.01 of its potential returns per unit of risk. The HEBA Fastighets AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,755 in HEBA Fastighets AB on September 14, 2024 and sell it today you would earn a total of 520.00 from holding HEBA Fastighets AB or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Hufvudstaden AB vs. HEBA Fastighets AB
Performance |
| Timeline |
| Hufvudstaden AB |
| HEBA Fastighets AB |
Hufvudstaden and HEBA Fastighets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hufvudstaden and HEBA Fastighets
The main advantage of trading using opposite Hufvudstaden and HEBA Fastighets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hufvudstaden position performs unexpectedly, HEBA Fastighets 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 HEBA Fastighets will offset losses from the drop in HEBA Fastighets' long position.| Hufvudstaden vs. Fabege AB | Hufvudstaden vs. Castellum AB | Hufvudstaden vs. Wallenstam AB | Hufvudstaden vs. Fastighets AB Balder |
| HEBA Fastighets vs. Atrium Ljungberg AB | HEBA Fastighets vs. Dios Fastigheter AB | HEBA Fastighets vs. Wihlborgs Fastigheter AB | HEBA Fastighets 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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