Correlation Between Invisio Communications and Fastighetsbolaget
Can any of the company-specific risk be diversified away by investing in both Invisio Communications and Fastighetsbolaget 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 Invisio Communications and Fastighetsbolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and Fastighetsbolaget Emilshus AB, you can compare the effects of market volatilities on Invisio Communications and Fastighetsbolaget 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 Invisio Communications with a short position of Fastighetsbolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and Fastighetsbolaget.
Diversification Opportunities for Invisio Communications and Fastighetsbolaget
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invisio and Fastighetsbolaget is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications AB and Fastighetsbolaget Emilshus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighetsbolaget and Invisio Communications 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 Invisio Communications AB are associated (or correlated) with Fastighetsbolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighetsbolaget has no effect on the direction of Invisio Communications i.e., Invisio Communications and Fastighetsbolaget go up and down completely randomly.
Pair Corralation between Invisio Communications and Fastighetsbolaget
Assuming the 90 days trading horizon Invisio Communications is expected to generate 1.37 times less return on investment than Fastighetsbolaget. But when comparing it to its historical volatility, Invisio Communications AB is 1.31 times less risky than Fastighetsbolaget. It trades about 0.15 of its potential returns per unit of risk. Fastighetsbolaget Emilshus AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,430 in Fastighetsbolaget Emilshus AB on September 5, 2024 and sell it today you would earn a total of 380.00 from holding Fastighetsbolaget Emilshus AB or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Invisio Communications AB vs. Fastighetsbolaget Emilshus AB
Performance |
| Timeline |
| Invisio Communications |
| Fastighetsbolaget |
Invisio Communications and Fastighetsbolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invisio Communications and Fastighetsbolaget
The main advantage of trading using opposite Invisio Communications and Fastighetsbolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications position performs unexpectedly, Fastighetsbolaget 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 Fastighetsbolaget will offset losses from the drop in Fastighetsbolaget's long position.| Invisio Communications vs. AB SKF | Invisio Communications vs. ASSA ABLOY AB | Invisio Communications vs. Atlas Copco AB | Invisio Communications vs. Boliden AB |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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